Gold Nears Record Highs at 2,868: Will It Break Above 2,900 Soon?
Gold prices are holding firm near record highs, with XAU/USD trading at 2,868.26 as of February 6, 2025.
This resilience comes amid escalating U.S.-China trade tensions and investor anticipation of critical U.S. job data, both of which are influencing safe-haven demand.
Trade Tensions Fuel Safe-Haven Demand
The ongoing trade conflict between the U.S. and China continues to be a major catalyst for gold’s upward trajectory. China’s recent complaint to the World Trade Organization (WTO) against new U.S. tariffs has intensified market uncertainty. The U.S. imposed a 10% tariff on Chinese imports, prompting retaliatory duties from China. This tit-for-tat escalation heightens geopolitical risks, historically a bullish factor for gold.
Soni Kumari, a commodity strategist at ANZ, notes, “Investors are eager to capitalize on gold’s rally, driven by strong returns. We could see gold approach the 3,000 mark unless trade tensions ease significantly.”
U.S. Economic Data and Federal Reserve Policy in Focus
Investors are closely watching U.S. economic indicators, with the weekly jobless claims data due at 13:30 GMT, followed by the non-farm payrolls report on Friday. These reports will offer insights into the labor market’s health and influence Federal Reserve policy decisions.
Federal Reserve officials have cited policy uncertainties, particularly around tariffs, as key challenges in setting future interest rate directions. Higher interest rates generally reduce gold’s appeal since it doesn’t yield interest, making the upcoming data crucial for market sentiment.
Gold Technical Analysis: Key Levels to Watch
- Current Price: 2,868.26
- Resistance Levels: 2,882.75 (immediate), 2,897.35, and 2,912.18
- Support Levels: 2,860.69 (immediate), 2,841.48, and 2,832.22 (50-period EMA)
Gold remains within an ascending channel, indicating sustained bullish momentum. A breakout above 2,882.75 could trigger buying interest, pushing prices toward 2,912.18. Conversely, a drop below 2,832.22, where the 50-period EMA provides dynamic support, might signal deeper corrections toward 2,808.06.
Key Takeaways:
- Gold trades near 2,868, supported by safe-haven demand.
- U.S.-China trade tensions and U.S. jobs data drive market sentiment.
- Technical indicators show bullish momentum, with potential for short-term corrections.
Gold’s trajectory will largely depend on geopolitical developments and economic data in the coming days. Investors should stay alert to shifts in both areas to navigate potential market moves effectively.
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