Gold price inched up on Monday, trading at $2,900 at the spot market after gaining 0.5%. The yellow metal’s upside is supported by cross-cutting concerns over unresolved tariff war pitting the United States and some of the world’s largest economies, including China, Canada and Mexico.
The tariff sentiment continues to exert downward pressure on the US dollar despite relatively stable US macroeconomic data. President Donald Trump announced a new set of tariffs against aluminium and steel imports last week, neutralising the goodwill created by an initial suspension on earlier tariffs imposed against Canada.
Trump also announced intention to impose reciprocal tariffs against some of US trading partners, that are perceived as having an “unfair” trade surplus. That has set the stage for a potential continuation of the upside by gold price. Meanwhile, UBS has raised its price target for the commodity, stating that it could go as high as $3,200 in 2025 before stabilising at higher levels. That infers a 10% upside on the current price.
The highlight of the week will be Wednesday’s release of January FOMC Minutes, which will provide pesrspective on the Federal Reserve’s interest rate posture in the high tariff ecosystem. Also, Trump is expected to expound his “reciprocal tariffs” plan, and that could inject fresh volatility into gold price. Elsewhere, the commencement of talks between Russia and Ukraine could shape geopolitical premium on the commodity.
Gold Price Prediction
Gold price pivots at $2,893 and the upside will continue if action stays above that level. With that, the next barrier will likely be at $2,908. However, a stronger momentum will break above that level and potentially test $2,920.
On the other hand, going below $2,893 will signal a shift in the momentum to the downside. That could see the first support established at $2,878. The upside narrative will be invalid if the price breaks below that level. However, an extended control by the sellers could test the second support at $2,867.
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