Gold shooting for the stars as Friday's US session sets fresh all-time high for bullion

LONDON (January 31) Gold’s price (XAU/USD) is printing an all new all-time high at the time of writing, near $2,581.75, set to hit an intraday resistance level as the US session gets underway. On the geopolitical front, markets got rattled by comments from US President Donald Trump who confirmed 25% tariffs to be imposed on Canada and Mexico, the two largest US trading partners, starting on Saturday, and threatened to impose 100% tariffs on BRICS nations if they try to replace the US Dollar with a new currency in international trade. This should act as a headwind for Bullion since it could lead to a trade war and inflation fears with price surges for consumers and manufacturers in the US. 

On the economic data front, inflation will be drawing all the attention, with the US Personal Consumption Expenditures (PCE) Price Index releases for December, the Federal Reserve’s preferred inflation gauge, due later on the day. Overall,  figures are expected to remain stable or marginally higher. 

Daily digest market movers: After German CPI fell, expectations are for softer PCE 

• US President Donald Trump is poised to unleash his first wave of tariffs on Saturday, sending foreign governments and businesses rushing to skirt potential duties and prepare for retaliation. Trump has pledged 25% tariffs on about $900 billion in goods from both Canada and Mexico, Bloomberg reports. 
• On Thursday, bullion already printed a fresh all-time high after the preliminary 2024 fourth-quarter reading of the US Gross Domestic Product (GDP) came in softer than expected, pointing to lesser growth in the US, Reuters reports. 
• President Trump reiterated on Thursday his threat of imposing 100% tariffs on BRICS nations if they try to replace the US Dollar (USD) with a new currency in international trade. Trump posted on TruthSocial: “We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US Dollar or, they will face 100% tariff,” and continued “there is no chance that BRICS will replace the US Dollar in international trade, or anywhere else, and any country that tries should say hello to tariffs, and goodbye to America!”
• At 13:30 GMT, the US Personal Consumption Expenditures (PCE) Price Index data for December will be released. Expectations are for the monthly core PCE reading to increase by 0.2% from 0.1% in November. The monthly headline PCE data should tick up  0.3% from 0.1% the previous month.
• Markets might face substantial volatility on Monday due to the possible sanctions being imposed over the weekend by the Trump administration on Canada and Mexico. 

Technical Analysis: No limits

After a spike higher on early Friday, hitting a fresh all-time high of $2,800.93, the question will be whether bullion will not face some substantial profit-taking. Tariffs are always considered inflationary, thus a headwind for the precious metal. Should the US data come in higher than expected later in the day, inflation concerns would spark more selling pressure, and Gold might quickly dive lower in search of support. 

The first support is quite far off, at $2,721, a triple top in November, December and January, broken on January 21. Just below that, $2,709 (October 23, 2024, low) is in focus as a second nearby support. In case both abovementioned levels snap, look for a dive back to $2,680 with a full-swing sell-off. 

Analysts and strategists have called for $3,000, but $2,800 looks like a good starting point for the next upside resistance. Based on the price action from Thursday, technical analysis (pivots) shows $2,809 and $2,824 as important daily resistance levels. 

FXStreet