Gold to extend its rally as market conditions remain favourable

By RoboForex Analytical Department 

Gold remains steady at 2,930 USD per troy ounce on Wednesday, hovering near last week’s record high of 2,940 USD. Ongoing concerns over US trade tariffs and global uncertainties continue to drive demand for safe-haven assets.

Key factors driving Gold prices

1. Escalating US trade tensions– On Tuesday, US President Donald Trump announced plans to impose 25% tariffs on automobiles, further escalating global trade disputes. Additional tariffs on semiconductors and pharmaceuticals have also been proposed, intensifying market concerns. Last week, Trump suggested these auto tariffs could take effect by 2 April.
2. US foreign policy shifts– Reports indicate that the White House may be considering lifting sanctions on Russia as part of diplomatic negotiations, adding to global market uncertainty.
3. Federal Reserve’s cautious stance– San Francisco Fed President Mary Daly reiterated that inflation remains uneven, supporting the Fed’s view that interest rates should remain unchanged for now. This aligns with the Fed’s earlier signals of maintaining a tight monetary policy, which could keep long-term inflation risks alive, indirectly supporting Gold prices.
4. Increased bullion demand– Gold shipments from Singapore to the US surged to a three-year high in January, indicating potential disruptions in bullion trading due to price differentials. This signals strong demand and market inefficiencies, contributing to rising gold prices.

Technical analysis of XAU/USD 

On the H4 chart, Gold has formed a consolidation range around 2,911 USD, extending its gains to 2,939 USD. A short-term pullback to 2,911 USD (testing support from above) is possible before the next rally. If Gold breaks higher, the next target will be 2,960 USD. After reaching this level, a correction towards 2,844 USD could follow. The MACD indicator supports this scenario, with its signal line above zero and sharply upwards, confirming strong bullish momentum.

On the H1 chart, Gold is forming a growth wave towards 2,946 USD. After reaching this level, a minor correction to 2,911 USD could occur before a new bullish wave extends towards 2,960 USD. The Stochastic oscillator confirms this outlook, with its signal line below 50 and trending towards 20, indicating a potential correction before the next leg higher. A subsequent rebound towards 80 would confirm further upside potential.

Conclusion

Gold maintains a firmly bullish outlook, supported by geopolitical risks, trade war concerns, and strong demand. While short-term corrections are likely, technical indicators support a continued rally towards 2,960 USD. Traders will closely monitor further developments in US trade policy and Fed monetary signals, as these will shape the next move in Gold prices.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.