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- Gold has already a fresh all-time high at around $2,955 on Thursday morning.
- US President Donald Trump mentioned a trade deal with China could be done.
- If US yields drop off further, several more all-time highs in Gold could be foreseen.
Gold’s price (XAU/USD) is stretching further its bullish momentum on Thursday while US yields are easing together with a weaker US Dollar (USD). The precious metal trades around $2,955 at the time of writing. The push higher comes after United States (US) President Donald Trump said that a trade deal with China could be possible. Geopolitical concerns grew after President Trump said Ukraine started the war with Russia and alluded it is time to repay the US for all the funding provided.
Meanwhile, the Federal Reserve (Fed) Minutes for the January policy meeting released on Wednesday had little impact. Only a handful of Federal Open Market Committee (FOMC) members advocated for a steady interest rate and no rush for any cuts. Considering this, chances for a June interest rate cut still stand.
Daily digest market movers: Physical risk in futures markets
- Thousands of Gold bars are being physically moved from the Bank of England’s vaults to the US futures market, exposing logistical bottlenecks in the global market. The move is driven by an arbitrage opportunity created by speculation that US President Donald Trump will impose tariffs on Gold, with traders buying spot Gold in London and selling futures contracts in the US, Bloomberg reports.
- Gold Fields Ltd. said its full-year profit surged by 77% last year after the precious metal price soared, while the company started to overcome operational challenges at mines in Chile and South Africa, Reuters reports.
- The relationship between the US and Ukraine reached a new low on Wednesday, with a social media frenzy between US President Donald Trump and Ukraine’s President Volodymyr Zelenskiy. There are growing concerns that Trump could halt American support for Ukraine after Russia invaded its neighbor in 2022. The US leader said on social media on Wednesday that Volodymyr Zelenskiy should “better move fast” to reach a deal with Russia, “or he is not going to have a country left,” Bloomberg reports.
Technical Analysis: Are we there yet?
Even with a softer tone on tariffs and a possible trade deal between the US and China, traders will still have enough reasons to push XAU/USD further up. The path to $3,000 looks set, and it is just a matter of time before Gold reaches it. As with several other asset classes, once the precious metal frenzy reaches the masses, it would be the cue to sell.
The first support for Thursday is $2,947, the Pivot Point’s R1 resistance, which coincides with Wednesday’s high. Further down, the daily Pivot Point comes in at $2,933. Below that level, Wednesday’s low and the S1 support converge at $2,919, which should be strong enough to support and brief selling pressure.
On the upside, the target level for Thursday is the R2 resistance at $2,961. With a light economic calendar, the level is likely to be tested later in the day. From there, the $3,000 handle comes in, although it might still be a bit too high to be tested this week.
XAU/USD: Daily Chart
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(This story was corrected on February 20 at 10:19GMT to say that traders buying spot Gold in London and selling futures contracts in the US, Bloomberg reports, not “Bloomberg supports.”)