Gold has reached new all-time highs following President Trump’s recent escalation over Greenland, providing a strong tailwind for the precious metal. This development adds to the bullish trend that continues to be supported by ongoing geopolitical tensions and the Federal Reserve’s dovish stance.
Tariff threats, similar to those seen last year, have been driving gold prices higher amid increased stagflation fears. Typically, high tariffs lead to slower economic growth combined with rising inflation—an environment that favours precious metals. Overall, gold remains well supported in the current climate.
However, traders should be aware of potential downside risks that could trigger price corrections. These include a possible easing of tensions over Greenland, especially if Trump decides to de-escalate. Another key factor is the US Supreme Court’s pending decision on Trump’s tariffs, which could impact market sentiment. Additionally, a hawkish shift in interest rate expectations driven by strong US economic data, especially the upcoming Non-Farm Payrolls report, could also weigh on gold prices.
Technical Analysis
On the daily chart, gold vaulted to a new record high following the weekend escalation. From a risk management perspective, buyers might find better risk-to-reward opportunities near the trendline if they wish to position for further gains. However, a significant pullback would likely require one of the aforementioned catalysts to play out.
The 4-hour chart shows a minor upward trendline that defines short-term bullish momentum. The price surged towards this trendline last Friday after Trump hinted he might keep Hassett in his current role. Buyers have stepped in around this level, with a clear risk defined below the trendline, aiming for new highs. Should there be another pullback, buyers are expected to continue using the trendline as support, while a break below it would open the door for a more substantial correction towards the major trendline.
On the 1-hour chart, gold has been consolidating within a channel, creating some indecision among buyers and sellers amid the Trump-induced price spikes. From a risk management standpoint, buyers may find better entries near the channel’s upper trendline to target further gains. Sellers will likely look for a break below the channel to push prices deeper towards the major trendline. The chart also highlights the average daily range for today, helping traders gauge potential price movements.
Upcoming Catalysts
Traders should monitor key upcoming events that could influence gold prices. Today’s releases include the weekly US ADP jobs report and the potential US Supreme Court ruling on Trump’s tariffs. Tomorrow, Trump’s speech at the World Economic Forum in Davos will be closely watched. On Thursday, the latest US Jobless Claims data is scheduled, followed by the US Flash PMIs on Friday. Market participants should also keep an eye on any headlines or posts from Trump on Truth Social regarding Greenland, as this remains a central focus driving volatility.
Original Source: Giuseppe Dellamotta of investinglive.com
