Gold prices are stabilizing near $2,930 early Friday, following two consecutive days of significant gains. Despite the brief pause, the yellow metal remains on track to secure its seventh consecutive weekly gain, largely driven by updates on U.S. President Donald Trump’s reciprocal tariffs and growing expectations that the U.S. Federal Reserve may maintain its easing stance this year.
Gold Consolidates Weekly Gains
While gold prices hold steady, they are benefiting from a series of recent economic data releases. U.S. inflation measures, including the January Consumer Price Index (CPI) and the unexpectedly strong Producer Price Index (PPI), have helped fuel speculation of further dovish actions from the Federal Reserve. Despite the PPI’s surprise upside, components of the index softened, reinforcing market expectations that the Fed could reduce interest rates in the coming months.
Reuters reported that U.S. rate futures are now pricing in a 31 basis point reduction this year, up from 27 basis points earlier in the week. The next expected rate cut is anticipated in October or December, a move that has contributed to a sharp sell-off in U.S. Treasury yields and the U.S. dollar, benefiting gold as a non-yielding asset.
Trump’s Tariff Plans Support Gold
In addition to inflation data, news that President Trump’s reciprocal tariffs plan is not expected to be imposed immediately has alleviated concerns in global markets. The announcement helped lift global stock markets while reducing demand for the safe-haven U.S. dollar, further pushing gold prices upward.
Market participants have largely ignored potential peace talks between Russia and Ukraine. Despite a statement from the Kremlin suggesting political will for dialogue, the focus remains squarely on tariff developments and U.S. inflation data.
Profit-Taking Likely as Gold Eyes Record Levels
As the week wraps up, gold prices could face a pullback as traders take profits following the metal’s record rally. With a long weekend ahead, investors may opt to cash in their positions. Future developments regarding Trump’s tariffs and broader market sentiment will play a key role in shaping the gold market’s direction.
The release of high-impact U.S. retail sales data is also anticipated to provide fresh insights into the Fed’s policy outlook and the strength of the U.S. dollar, both of which could influence gold prices in the short term.
Technical Analysis: Gold Price Outlook
From a technical perspective, the daily chart suggests that gold could experience a minor pullback toward the rising trendline support at $2,892. The 14-day Relative Strength Index (RSI) has flattened while remaining in overbought territory, signaling that a fresh dip may be on the horizon.
Should selling pressure intensify below this key support level, gold could extend its decline toward the psychological barrier of $2,850. Conversely, if upward momentum resumes, buyers will aim to challenge the record high of $2,943, with the next significant resistance at the $3,000 round number.
As the market digests economic data and geopolitical developments, gold remains a focal point for traders seeking shelter from market volatility and inflation concerns.
Conclusion
As gold continues to ride the momentum from recent gains, the market faces a delicate balance between sustained demand driven by U.S. economic data and potential profit-taking after its record surge. Investors will be closely watching developments related to Trump’s tariffs, U.S. inflation, and future Fed actions. Any signs of further dovish policy from the Fed or unexpected geopolitical shifts could provide the catalyst for gold to continue its ascent toward the $3,000 mark. However, a short-term retracement remains possible as traders assess their positions and prepare for what lies ahead.