Gold price holds above $2,900 as traders weigh inflation risks and Fed policy
Gold nears record highs as Treasury yields decline
Gold price has maintained its bullish trajectory despite the daily RSI indicating oversold conditions since early February. After briefly slipping below $2,860 on Wednesday, the metal quickly rebounded above the key psychological level of $2,900, signaling persistent strength.
By Thursday’s Asian session, gold pushed higher to $2,920 per ounce before pulling back slightly to $2,910 in the European session—just 1% away from its all-time high of $2,940 per ounce. The $2,900 level may now act as support, cushioning any short-term declines.
A key driver of gold’s resilience has been the latest decline in U.S. Treasury bond yields, which dragged the U.S. dollar to its weekly low, making the metal more attractive to investors. Additionally, expectations that former President Trump’s protectionist policies could exacerbate already elevated inflation in the U.S. have bolstered gold’s appeal as a hedge against rising prices.
Gold price dynamics (November 2024-February 2025). Source: TradingView.
U.S. PPI data could shape gold’s price trajectory
While inflation concerns support the metal, the Federal Reserve’s hawkish stance remains a limiting factor. Wednesday’s stronger-than-expected U.S. Consumer Price Index (CPI) reinforced market expectations that the Fed will keep interest rates steady for an extended period. Higher interest rates typically weigh on non-yielding assets like gold, curbing further upside potential. Traders now turn their attention to the U.S. Producer Price Index (PPI) release later today, which could influence gold’s next move.
With gold trading near record highs and supported by macroeconomic factors, its price trajectory remains in focus. The battle between inflation concerns and Fed policy decisions will likely dictate the next significant move, with the $2,900 level acting as a pivotal point for market sentiment.
Gold price struggle to regain momentum after a sharp 2% decline from all-time high. The price weakness follows hawkish remarks from Federal Reserve Chair Jerome Powell on Tuesday
