XAUUSD H4 Idea | GOLD

Gold prices remain near record highs as investors continue to flock to the precious metal amid rising trade tensions and persistent inflationary pressures. U.S. President Donald Trump’s recent executive order, which paves the way for reciprocal tariffs, has injected fresh uncertainty into global markets, driving up demand for gold as a safe haven. This surge in interest is supported by robust inflation data; the Consumer Price Index rose by 0.5% in January while the Producer Price Index increased by 3.5% year-over-year. These figures suggest that inflation remains a formidable force, keeping the Federal Reserve on high alert and delaying potential rate cuts—even as expectations build for a possibly softer reading in the upcoming Personal Consumption Expenditures index, the Fed’s preferred gauge.

On the technical side, gold’s multi-week rally appears to be intact. The prevailing trend is upward, with a break above $2,942.78 potentially signalling further gains, while the nearest support is found around $2,739.81. Despite the bullish momentum, the extended seven-week rally leaves the market somewhat vulnerable to a reversal, as indicated by the recent closing level of $2,882.48—a modest gain of 0.74% over the past week.

Adding to the uncertainty, U.S. retail sales fell by 0.9% in January, a much sharper decline than the forecasted 0.2%, casting doubt on the strength of consumer spending and broader economic momentum. This downturn contributed to a decrease in Treasury yields, although yields remain elevated compared to earlier in the year. The combination of these economic signals and geopolitical uncertainties continues to reinforce gold’s status as a favoured asset during turbulent times.

Overall, while the bullish bias for gold remains strong amid trade war fears and inflation concerns, investors will be watching upcoming economic data closely to determine whether the rally can be sustained or if a pullback is on the horizon.