Gold Prices Eye $3,000 as Tariff Tensions and Inflation Worries Mount

“The tariff announcement is spurring fears of a broader trade conflict,” said Ajay Kedia, director at Mumbai-based Kedia Commodities. “This uncertainty is pushing gold toward the $3,000 level, though the market appears slightly overbought and may see some profit-taking soon.”

Inflation Data Fuels Safe-Haven Demand

Gold’s recent rally has also been supported by robust U.S. inflation data. The Producer Price Index (PPI) for January rose more than expected, following a Consumer Price Index (CPI) report that showed inflation accelerating at its fastest pace in 18 months. These figures have strengthened market sentiment that the Federal Reserve will maintain its restrictive monetary policy well into the year.

Historically, gold benefits from inflation concerns due to its role as a hedge against eroding purchasing power. However, higher interest rates often diminish its appeal by increasing the opportunity cost of holding non-yielding assets.

Global Demand Dynamics Shift as Prices Soar

Despite gold’s impressive performance, demand patterns in key markets are shifting. In India, the world’s second-largest gold consumer, jewelry sales have slowed during the wedding season due to record-high prices. Chinese dealers are reportedly offering discounts to attract buyers as domestic demand wanes.

Nonetheless, global interest in gold remains high, particularly from institutional investors seeking shelter from economic uncertainty.

Technical Outlook: Gold Spot (XAU/USD)

• Price: $2,928.37

• Timeframe: 1-Hour

Gold continues to trade within an ascending trend, supported by a weaker U.S. dollar and persistent inflation concerns.

• Key Levels:

  • Pivot Point: $2,923.65

  • Immediate Resistance: $2,942.54

  • Next Resistance: $2,953.87, $2,965.00

  • Immediate Support: $2,913.43

  • Next Support: $2,908.47, $2,894.41

• Technical Indicators: 50-hour EMA: $2,913.43 (bullish support)

The 50-hour EMA serves as dynamic support, reinforcing the metal’s upward trend. A break below $2,913 could trigger a retracement to $2,882.11. Conversely, a break above $2,942 may signal further gains toward the psychological $3,000 mark.

Conclusion:

Gold’s outlook remains bullish as trade tensions and inflation fears persist. However, traders should watch for potential profit-taking if prices near $3,000. Technical indicators support continued upside, but key resistance at $2,942 must be breached for further gains.