Gold prices (XAU/USD) are experiencing slight gains on Monday following an initial surge during the Asian session. Although tariffs are still set to be implemented on Tuesday for Mexico, Canada, and additional tariffs on China, they are not triggering a significant shift toward gold as a safe-haven asset. Traders are now awaiting further headlines about tariffs, with the possibility that U.S. President Donald Trump could reconsider his stance on the trade measures.
Global Developments Impacting Market Sentiment
Traders are also processing Friday’s events, particularly the ongoing tension between Ukrainian President Volodymyr Zelenskyy and U.S. President Trump, along with Vice President J.D. Vance. The situation escalated with a surprising move in London, where the United Kingdom extended billions in loans backed by frozen Russian assets in Europe. This decision aligned with President Trump’s goals, but it also introduced a new layer of uncertainty to the geopolitical landscape. With no deal on rare earth elements in place and ongoing diplomatic conflicts, the prospect of the U.S. withdrawing from NATO is now on the table, further complicating the market outlook.
Daily Digest: Key Market Movers for Gold
In Africa, Ghana’s new central bank chief, Johnson Asiama, announced the suspension of the country’s program of paying for oil with gold. He also expressed confidence that the Ghanaian cedi (GHC) would stabilize after last year’s volatility, according to Bloomberg reports.
The CME FedWatch tool shows a 77.6% chance of the Federal Reserve cutting interest rates in June, with the likelihood of rates remaining unchanged at 22.4%. This comes as U.S. economic data continues to suggest slowing growth, providing further support for gold as an alternative investment.
Later on Monday, Federal Reserve Bank of Richmond President Thomas Barkin is scheduled to deliver a speech titled “Inflation Then and Now” in Fayetteville, North Carolina. Market participants will be closely watching any comments related to inflation and interest rate expectations. Meanwhile, the U.S. 10-year benchmark bond yield is trading around 4.23%, slightly higher from its recent low of 4.19% on Friday.
Technical Analysis: Key Levels and Market Sentiment
From a technical perspective, gold is currently finding support at the daily pivot point of $2,857, which could act as a foundation for a potential upward move. However, for gold to reach new all-time highs or move in that direction, fresh tariffs and a continued decline in yields are necessary. If these conditions materialize, it could set the stage for a rally in gold prices.
The first resistance level to watch is $2,882, which coincides with the lows from February 14 and 17. If gold can break through this level, the next resistance at $2,910 could act as a cap for the day.
On the downside, support at $2,835 aligns with Friday’s low and will be crucial for preventing further declines. If gold bulls want to avoid a downward leg, this level must hold. Below that, the $2,805 support zone could absorb additional downward pressure, aiming to prevent a drop below $2,800 and $2,790.
Conclusion
Gold’s price remains volatile amid ongoing concerns over trade tariffs and geopolitical tensions. While the market is digesting various global developments, including tensions between Ukraine and U.S. officials and the potential for NATO shifts, gold is finding limited momentum without fresh catalysts. Traders are closely monitoring U.S. economic data and potential changes in U.S. monetary policy, with the Federal Reserve’s next moves potentially playing a pivotal role in determining gold’s direction. In the short term, key support and resistance levels will guide gold’s price action, with a focus on the $2,857 pivot and the potential for a rally if new tariffs or further yield declines emerge.