Gold price posts 3rd straight day gain amid tariffs and Fed rate cuts
Gold edges closer to all-time high, reaching $2,758 amid bullish momentum
Gold prices continued their upward momentum on Wednesday, briefly reaching $2,758 per ounce in the Asian trading session before softening to $2,750 during early European hours.
The precious metal remains positioned for its third consecutive daily gain this week, having risen 2% since Monday and extending its rally from December’s lows. With a year-to-date gain of 4.8%, gold is now just 1.5% away from its all-time high of $2,790.
The recent strength in gold stems from two critical factors: heightened demand for safe-haven assets and expectations of monetary easing by the Federal Reserve. Former U.S. President Donald Trump's tariff threats have sparked investor interest in the non-yielding metal. Concurrently, market bets on at least two Fed rate cuts this year further bolster gold’s appeal, as lower interest rates reduce the opportunity cost of holding the metal.
Gold price dynamics (October 2024-January 2025). Source: TradingView.
Gold price projection: Gold eyes $2,790 despite risk-on mood
Despite a generally risk-on market mood, gold has defied typical trends by maintaining its bullish trajectory. Even a modest recovery in U.S. Treasury yields, which lifted the U.S. dollar from a two-week low, has done little to dent buying interest in gold.
Adding to this positive outlook, Tuesday’s breakout above the $2,725 resistance level has turned this price point into a near-term support zone, enhancing technical confidence for further gains.
That said, the Relative Strength Index (RSI) on the 4-hour chart reveals overbought conditions, indicating the potential for a short-term pullback. While the metal remains within striking distance of its record high, technical signals suggest that gold is unlikely to reach $2,790 this week, however, traders may look to $2,725 as a critical support level should prices retrace.
Gold surged 1% on January 21, climbing from $2,700 to $2,730 during the Asian session.Following President Donald Trump's inauguration, gold experienced muted price movement with limited gains.
