Gold Prices Edge Higher Amid Market Volatility
In early Monday trading (January 27) in the Asian market, spot gold rebounded slightly, with prices currently near $2,773 per ounce. This marks a recovery of nearly $10 from the intraday low of $2,763.65 per ounce. Analysts predict that gold prices may soon challenge the all-time high of $2,790.15 per ounce, set on October 31 last year.
Christian Borjon Valencia, an analyst at FXStreet, anticipates that gold prices could continue their upward trend, testing and potentially surpassing the record high. He notes that to maintain bullish momentum, gold would need to clear $2,790 per ounce, with subsequent resistance levels at $2,800, $2,850, and $2,900 per ounce.
The recent rise in gold prices is attributed to increased demand for safe-haven assets amid heightened geopolitical tensions. U.S. President Donald Trump’s latest trade measures, including a 25% tariff on all imports from Colombia and additional retaliatory actions, have fueled market uncertainty. Bart Melek, head of commodities strategy at TD Securities, emphasized that these tariff-related developments have driven investors toward gold as a hedge against volatility.
Market participants are also monitoring potential inflationary pressures and central bank policy responses. Melek pointed out that expectations of higher inflation and looser monetary policies may further support gold prices.
Standard Chartered highlighted that market focus has shifted to February 1, when significant trade policy announcements are anticipated, overshadowing the Federal Reserve meeting scheduled for January 29. Short-covering sentiment has contributed to the recent rise in gold prices, though ETF flows remain volatile ahead of the Fed’s meeting.
From a technical perspective, Valencia cautioned that the Relative Strength Index (RSI) indicates overbought conditions, suggesting traders may be hesitant to push prices higher immediately. If gold prices fail to maintain momentum and fall below $2,750 per ounce, the 50-day and 100-day simple moving averages at $2,656 and $2,653 per ounce, respectively, would provide key support levels. Further declines could test the 200-day moving average at $2,520 per ounce.
