gold has continued its upward trend, marking its highest price in two months at $2,750, as mounting concerns over trade tensions push investors toward safer assets. The market has reacted to recent statements from US President Trump about imposing new tariffs on China, which have heightened fears of a trade conflict. Trump indicated a potential 10% tariff on Chinese goods, particularly in relation to fentanyl sales, scheduled to take effect from February 1. He also mentioned possible tariffs on the European Union, contributing to a decline in risk appetite among investors.
This escalation in trade tensions has prompted a notable sell-off in Chinese stocks, reinforcing the appeal of gold and other safe-haven assets. Amid these developments, Chinese Vice Premier Ding Xuexiang remarked on the detrimental effects of trade wars, stating that “there are no winners,” during a speech at the World Economic Forum in Davos. As uncertainty looms, gold ’s status as a safe investment continues to draw interest.
Nonetheless, the sustainability of gold ’s recent rally is uncertain. Traders may react positively to Trump’s announcement regarding a joint venture in artificial intelligence, potentially overshadowing the impacts of the new tariffs. This initiative, involving significant investment from companies like OpenAI, SoftBank, and Oracle, could bolster market sentiment.
Additionally, the slight recovery in U.S. Treasury bond yields may counteract the anticipated dovish stance of the Federal Reserve regarding interest rate cuts, which could limit further gains for gold . Current market expectations suggest a total reduction of around 37 basis points this year, with initial cuts projected later in July.
In technical terms, gold appears poised to challenge previous highs, with a key resistance level positioned at $2,790. The recent bullish momentum, supported by various technical indicators, underscores ongoing buyer interest. However, should the price fall below $2,700, it may face additional selling pressure, particularly near the critical support levels around $2,650.
