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Key factors driving Gold prices

On Monday, Trump confirmed that tariffs on Canadian and Mexican imports will proceed as planned. This triggered fresh market concerns over inflation risks, which could influence the Federal Reserve’s future monetary policy.

In addition to geopolitical tensions, Gold is receiving support from the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund. The fund reported increased assets to 904.38, marking the highest level since August 2023.

Investors focus now shifts to Friday’s Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge. The data is expected to show the slowest price growth since June 2024. However, persistent inflationary pressures may keep the Fed cautious about cutting interest rates too soon.

Technical analysis of XAU/USD

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On the H4 chart, XAU/USD is consolidating around 2,938. A potential downward move towards 2,911 (a test from above) is likely before a renewed growth wave targets 2,960 as a local high. Once this level is reached, a corrective decline towards 2,860 could begin. The MACD indicator confirms this outlook, with its signal line above the zero level and pointing decisively upwards.

(Click on image to enlarge)

On the H1 chart, Gold recently formed a growth wave to 2,956 before correcting back to 2,938. A consolidation range is expected to develop around this level. If the price breaks downwards, a move towards 2,920 could occur before another upward impulse targets 2,960. The Stochastic oscillator supports this scenario, with its signal line below 20, indicating an imminent rise towards 80.
 

Conclusion

Gold remains in a strong uptrend, supported by safe-haven demand, geopolitical uncertainties, and increased holdings in gold-backed ETFs. Technical indicators suggest a potential short-term dip before another move higher towards 2,960. However, investors should watch upcoming inflation data, which could influence the Fed’s rate outlook and Gold’s trajectory.

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