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Gold Gains Traction as the USD Struggles

A declining US dollar (USD) and continued worries over international trade tensions have helped gold prices start the week higher. Gold, a popular safe-haven asset, is benefiting from investor concerns about the Federal Reserve's monetary policy stance, which fuels expectations of interest rate decreases.

With traders betting on multiple rate cuts by the US Federal Reserve (Fed) this year, the price of gold (XAU/USD) has rebounded from a three-week low and is currently trading in the $2,833-2,832 range. Market consensus suggests the Fed may cut rates twice by the end of the year, likely weakening the USD and increasing demand for the non-yielding yellow metal. Learn more about trading signals and gold price trends: KQ Markets Trading Signals.

Gold price chart analysis by KQ Markets

Trade War Jitters Add to Gold’s Appeal

Rising trade tensions have also played a major role in maintaining gold prices. President Donald Trump’s plan to increase tariffs on Chinese goods and impose tariffs on Canadian and Mexican imports has heightened concerns about a global trade war, prompting investors to seek safe-haven assets like gold. Explore how geopolitical events impact commodity markets: KQ Markets Commodities.

Economic Indicators and Market Sentiment

  • PCE Price Index: Increased by 0.3% in January, with an annual rate declining from 2.6% to 2.5%.
  • Core PCE Price Index: Rose 2.6% year-over-year, down from 2.9% the previous month.
  • US Consumer Expenditure: Unexpectedly fell by 0.2%, the worst contraction in nearly four years.

These economic data points have fueled speculation that the Fed may intervene by cutting rates to support the economy. Stay updated with forex market insights: KQ Markets Forex.

Technical Outlook: Key Levels to Watch

  • Resistance: $2,885, with potential for a rally toward $2,934 and $2,956 if broken.
  • Support: Immediate downside at $2,833-2,832, followed by $2,815-2,810 at the 38.2% Fibonacci retracement level. A drop below $2,800 may signal a trend reversal.

Looking Ahead

Investors will focus on upcoming US economic data, including Nonfarm Payrolls and the ISM Manufacturing PMI, for further insights into the Fed’s policy stance. Signs of economic weakness may reinforce expectations of rate cuts, lending further support to gold. Stay informed about share market trends: KQ Markets Shares.

Conclusion: How Gold’s Performance Affects Traders and Markets

As gold prices respond to economic shifts and geopolitical developments, traders must stay informed about its market impact. Inflation risks, central bank policies, and global uncertainties will continue to shape price movements.

At KQ Markets, we provide expert insights into global market trends, economic updates, and technical analysis to guide trading strategies. Whether in CFD trading, forex, or commodities, staying updated on gold’s market performance is essential for informed investment decisions.

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