Gold prices extended their winning streak on Thursday, consolidating near the record highs of $2,882 set on Wednesday. The precious metal has benefited from sustained US Dollar (USD) weakness and an extended correction in US Treasury bond yields. As global trade tensions ease, particularly with the US-Sino tariff situation, and geopolitical conflicts like the Israel-Hamas issue show signs of resolution, the safe-haven appeal of the USD has diminished, allowing gold to maintain its upward momentum.
Gold Price Supported by Geopolitical and Economic Factors
President Donald Trump’s stance on trade and his diplomatic efforts to address the Israel-Hamas conflict have relieved some of the market’s risk concerns, further weighing on the USD. Additionally, expectations of policy divergence between the US Federal Reserve (Fed) and the Bank of Japan (BoJ) have also weakened the USD, particularly against the Japanese Yen, providing further support for gold.
As markets turn their focus to the upcoming US Nonfarm Payrolls (NFP) data on Friday, the gold price could see fresh impetus. The NFP release will provide crucial insights into the US job market, influencing expectations around the Fed’s future policy moves. Meanwhile, the Fed’s stance on inflation and any further developments in Trump’s trade policies could have a significant impact on the direction of gold.
Gold Price Technical Outlook
Gold faces potential pullback risks if it fails to hold above the $2,850 level. A sustained move lower could push gold towards the $2,800 level, and even the February 3 low of $2,772 could come into focus. However, the 50-day and 100-day Simple Moving Average (SMA) Bull Cross continues to support the bullish outlook, with the psychological barrier of $2,850 holding steady.
For further upside, gold buyers will need to break the record highs of $2,882, with the next key target set at the $3,000 round level.
Conclusion
Gold’s strong rally remains intact, buoyed by USD weakness, geopolitical factors, and expectations of Fed policy cuts. The upcoming US jobs data and Fedspeak will be crucial in shaping market sentiment and providing the next catalyst for gold prices. If gold maintains its upward momentum, it could see further gains toward $3,000, but any shift in economic or political developments could reverse its gains. Traders should keep a close eye on the NFP report and any updates regarding US trade policies.