Profit-Taking Triggers Pullback, but Trade War Fears Keep Gold’s Safe-Haven Appeal Intact
Gold prices retreated slightly on Monday, with XAU/USD falling to $2,925 in the Asian session, down 0.38% for the day. The pullback comes after gold hit a new all-time high of $2,954 last week, prompting investors to lock in profits. However, growing fears of a global trade war, fueled by US President Donald Trump’s tariff plans, could keep safe-haven demand elevated, limiting further downside.
Despite short-term selling pressure, fundamental support for gold remains strong, with rising inflation concerns, geopolitical tensions, and central bank policies all reinforcing the bullish outlook for the precious metal.
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Gold Price Technical Analysis – Key Levels to Watch
📊 Technical Indicators Show Short-Term Weakness but Long-Term Strength
✅ XAU/USD faces initial resistance near $2,950, its recent all-time high.
✅ The 50-period EMA supports gold’s uptrend, currently sitting at $2,900.
✅ RSI remains in overbought territory, indicating potential for a short-term correction.
📈 Resistance Levels to Watch:
- $2,950 – Immediate resistance, previous all-time high.
- $3,000 – Psychological milestone.
- $3,050 – Extended breakout target.
📉 Support Levels to Watch:
- $2,900 – Key technical and psychological level.
- $2,875 – First Fibonacci retracement support.
- $2,850 – Deeper correction level if selling pressure intensifies.
Fundamental Drivers – What’s Moving Gold Prices?
📌 Profit-Taking Triggers Pullback, but Bullish Fundamentals Remain
- Gold retraced from $2,954 on profit-taking, but analysts say the overall trend remains intact.
- “It’s a classic move after an all-time high, but gold’s fundamentals remain strong,” said Alex Ebkarian, COO at Allegiance Gold.
📌 Trump’s Tariff Plans Fuel Safe-Haven Demand
- Trump’s announcement of new tariffs on lumber, cars, semiconductors, and pharmaceuticals is raising concerns over global trade tensions.
- Peter Grant, VP at Zaner Metals, noted that ongoing trade disputes could increase inflation concerns, driving investors to gold.
📌 Federal Reserve’s Hawkish Stance Limits Upside
- FOMC minutes from January suggested that rising inflation concerns could delay further Fed rate cuts.
- A stronger US dollar could weigh on gold prices, as USD strength makes gold more expensive for international buyers.
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Conclusion – What’s Next for Gold Prices?
💡 Market Outlook:
✅ Gold needs to hold above $2,900 to sustain its bullish trend.
✅ If profit-taking continues, further declines toward $2,875 or $2,850 are possible.
✅ A breakout above $2,950 could push XAU/USD toward $3,000 in the near term.
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