Safe-Haven Demand Remains
Gold prices have broken out to fresh highs today as safe-haven demand for the yellow-metal remains firm in the face of ongoing global adjustments. While there have been positive developments in the geopolitical sphere recently, such as the Israel-Hamas ceasefire holding out and now the prospect of an end to the Russia-Ukraine conflict, investors remain unsettled over lingering trade war risks.
Trump Trade War Risks
Comments this week from Trump, threatening new tariffs on all autos and pharmaceuticals have spooked investors. These comments show that Trump’s trade war is far from over and with unpredictable announcements like these now a signature of his administration, gold prices remain vulnerable to further upside near-term. Trade war risks had somewhat weakened prior to these comments with Trump announcing a shift in strategy on reciprocal tariffs which will now be applied on a country-to-country basis instead of as a blanket tariff. Additionally, with these tariffs not due to come into effect until April, there is room for negotiation. Still, with Trump maintaining aggressive rhetoric elsewhere on trade, investors look likely to continue to store capital in gold for now.
IB’s Upgrade Gold Forecasts
Indeed, we saw Goldman Sachs this week revising its year end gold forecast higher to $3100, citing projections of sustained central bank buying. This was echoed by UBS which also revised its forecasts higher, reflecting an ongoing shift in outlook for the gold market while global trade risks remain a key threat.
Technical Views
XAUUSD
Gold prices are now once again testing the 2,949.88 level and the bull channel highs. With momentum studies bullish, focus is on a fresh break higher here. 2,859.15 remains the key near-term support to watch with 2,789.40 the pivot for bulls to maintain.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.