Fundamental Analysis
Gold prices continue to rebound, retesting monthly highs of $2,725 early Tuesday. Gold buyers are re-entering the market in response to US President Donald Trump’s tariff threats, which are fueling risk-off sentiment across financial markets. Trump has indicated that he is ready to impose tariffs on China if Beijing does not approve the TikTok deal. This has driven investors to seek safety in gold, supporting prices near the monthly highs of $2,725. However, further gains for gold buyers may be limited as the US Dollar (USD) strengthens on safe-haven demand, putting a cap on the dollar-denominated precious metal. Additionally, while expectations of two interest rate cuts from the US Federal Reserve (Fed) this year, following mild December inflation data, provide support for gold, this outlook could shift if inflation concerns dampen investor sentiment.
Gold
The short-term technical outlook for gold remains positive. The recent breakout from a symmetrical triangle pattern is still intact, and the yellow metal is trading well above all major daily moving averages, reinforcing the bullish sentiment. The 14-day Relative Strength Index (RSI) is trending upward above the midline, further supporting the bullish case. Currently, the Stochastic Oscillator is at 89, and the RSI stands at 63.