Gold Prices Struggle Below Record High as Bearish Momentum Weakens Amid Trade Uncertainty.

Gold Prices Struggle Near Record Highs as Trade War Fears Support Safe-Haven Demand

Gold prices (XAU/USD) maintain a bearish bias during the Asian session on Tuesday but continue to hover near the all-time high reached the previous day. While slightly overbought conditions on the daily chart have prompted some profit-taking, strong bearish conviction remains absent. Ongoing concerns about the global economic impact of U.S. trade policies and expectations of further Federal Reserve rate cuts are helping to support the precious metal.

Gold Price Faces Resistance as Investors Lock in Profits

The U.S. Dollar rebounded slightly from a two-month low, triggering some selling pressure on gold as traders took profits amid overbought technical conditions. However, trade war uncertainties continue to act as a tailwind for gold, reinforcing its appeal as a safe-haven asset. U.S. President Donald Trump reaffirmed that tariffs on Canadian and Mexican imports remain on schedule, with reciprocal duties on other countries also expected to proceed. This escalation in trade tensions raises concerns about potential economic fallout, increasing demand for gold as a hedge against uncertainty.

Meanwhile, weaker U.S. economic data has reinforced market expectations of at least two Fed rate cuts this year. Despite this, Chicago Fed President Austan Goolsbee stated that the central bank will adopt a “wait-and-see” approach before committing to further rate reductions. Investors are closely monitoring upcoming U.S. economic indicators, including the Consumer Confidence Index and Richmond Manufacturing Index, for further direction.

ETF Inflows Signal Growing Gold Demand

The latest data from the World Gold Council (WGC) reveals that physically backed gold exchange-traded funds (ETFs) saw their largest weekly inflow since March 2022 last week. This suggests strong investor confidence in gold’s long-term value amid economic uncertainty.

Key Events to Watch for Gold Traders

Market participants are now awaiting key U.S. economic releases, including:

• Conference Board’s Consumer Confidence Index
• Richmond Manufacturing Index
• Fedspeak on interest rate policy
• U.S. Personal Consumption Expenditures (PCE) Price Index (Friday release)

The PCE Price Index, the Federal Reserve’s preferred inflation gauge, could play a crucial role in shaping expectations for future interest rate decisions. If inflation pressures remain subdued, the likelihood of further rate cuts may increase, providing additional support for gold prices.

Gold Price Outlook: Can Bulls Maintain Momentum?

While gold prices face short-term resistance due to profit-taking and a modest USD recovery, long-term fundamentals remain supportive. Persistent trade war fears, Fed rate cut expectations, and rising ETF inflows all contribute to gold’s resilience. However, a confirmed breakout above recent highs or strong selling pressure will be needed to determine the next major price move.

Stay tuned for key economic updates that could shape gold’s trajectory in the coming days!