Gold Outlook: Gold’s price remains close to its ATH figure

Since our last report, gold’s upward direction was this week as well, despite retreating from its newly formed all-time high figure at roughly $2940 per troy ounce. In today’s report, we are to discuss the possible implications of Trump’s continued tariff ambitions and the possibility of a peace deal to end the war in Ukraine. For a rounder view, we will conclude the report with a technical analysis of gold’s four-hour chart.  

Trump tariff plans continue

The White House announced last Thursday that President Trump had signed a Presidential Memorandum ordering the development of a comprehensive plan for restoring fairness in U.S trade relationships and countering non-reciprocal trading arrangements. According to the statement released by the White House, “The Fair and Reciprocal Plan will seek to correct longstanding imbalances in international trade and ensure fairness across the board.” Overall, it appears that the administration may be implementing reciprocal tariffs on its trading partners in the near future.

In turn, the uncertainty surrounding trade and international relationships may be leading to increased uncertainty as to how to price in tariffs and their true implications. In turn, investors may turn to gold as a safe haven asset which may have aided the precious metal’s price. In our view, the uncertainty surrounding Trump’s tariff ambitions and the possible trade wars that may ensue could aid gold’s price given its status as a safe haven asset.

Ukraine-Russia peace deal in the works?

President Trump last week held a phone call with President Putin, sparking immediate concern that the US was preparing to “sell-out” Ukraine. President Trump stated following the call that negotiations to end the war would begin “immediately” and at the time of this report, talks between US and Russian officials have started in Riyadh which are “primarily devoted to restoring the whole complex of Russian-American relations” per Kremlin spokesman Peskov and that “there will be discussions on possible negotiations on a Ukrainian resolution”.

The most recent update in the peace talks which occurred today was the statement by the US Secretary of State Rubio who stated per the Guardian that “The goal is to bring an end to this conflict in a way that’s fair, enduring, sustainable and acceptable to all parties involved.

What that looks like? Well, that’s what this what the ongoing engagement is going to be all about.” However, Ukraine according to its President, has not been invited to the negotiation table and thus we remain highly skeptical of any ceasefire or peace proposals that could be presented which have not received the support and approval of Ukraine.

Nonetheless, should a peace agreement be implemented and signed by all parties, it could ease geopolitical concerns in Europe and could in turn weigh on the precious metal’s price and vice versa.

Gold Technical Analysis

XAUUSD 4H Chart

• Support: 2880 (S1), 2835 (S2), 2785 (S3)
• Resistance:: 2940 (R1), 2980 (R2), 3020 (R3)

   Gold’s price continued its upward movement in the past week despite retreating from its recently formed all-time high figure near our 2940 (R1) resistance line. We opt for a sideways bias for the precious metal’s price and supporting our case is the RSI indicator which currently registers a figure near 50, implying a neutral market sentiment.

Moreover, we would like to mention our sideways moving channel which was incepted on the 11    of February. For our sideways bias to continue we would require gold’s price to remain confined between the 2880 (S1) support level and the 2940 (R1) resistance line.

On the other hand, we would immediately opt for a bullish outlook in the event of a clear break above our 2940 (R1) resistance line, with the next possible target for the bulls being the 2980 (R2) resistance level. Lastly, for a bearish outlook, we would require a clear break below the 2880 (S1) support level with the next possible target for the bears being the 2835 (S2) support line

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