Technical Analysis

GOLD Price Analysis – Feb 05, 2025

By LHFX Technical Analysis
Feb 5, 20254 min
Gold

Daily Price Outlook

Gold price (XAU/USD) prolonged its upward trend and remained well bid around the 2,869 level, reaching an intra-day high of 2,870. This rise can mainly be attributed to fears over the ongoing US-China trade war, which has boosted demand for gold as a safe-haven investment. Investors are turning to gold as a protective asset amid concerns over the trade tensions between the two largest economies.

Moreover, the weakening of the US Dollar (USD), driven by expectations that the Federal Reserve (Fed) will continue cutting interest rates in 2025, is adding more momentum to gold’s rally. These factors combined are pushing gold prices higher.

Despite some positive market sentiment, such as US President Donald Trump’s decision to delay tariffs against Canada and Mexico, which typically boosts riskier assets, gold prices are still climbing.

This suggests that gold remains in demand, with the path of least resistance pointing upward. However, the price of gold could face some resistance soon, as the market is showing signs of being slightly overbought. Traders are now waiting for new US economic data to provide fresh direction for the metal’s price.

Gold Price Soars Amid US-China Trade Tensions and Weak Job Market Data

On the US front, the broad-based US dollar has been under pressure as fears of a global trade war rise, especially after China retaliated to US President Donald Trump’s new tariffs. This has boosted demand for gold, pushing its price to a fresh record high.

In addition, data from the Job Openings and Labor Turnover Survey (JOLTS) showed a slowdown in the US job market, with job openings falling from 8.09 million to 7.6 million in December. This slowdown adds to expectations that the Federal Reserve may cut interest rates further, which keeps the USD weak and supports gold’s rise.

Despite some positive news, like Trump delaying tariffs for Canada and Mexico, easing trade war tensions, gold has remained strong. Investors continue to view gold as a safe-haven asset amid ongoing trade concerns. This continued demand for gold suggests its price will likely stay supported in the short term.

However, the upcoming release of US economic data, including the ADP report and ISM Services PMI, could bring short-term volatility to the market. But all eyes will be on the US Nonfarm Payrolls (NFP) report on Friday, as it will give a clearer picture of the US labor market and could influence gold price movements.

Therefore, the ongoing trade tensions and weak US job market data support gold’s rise as a safe-haven asset. Expectations of further Fed rate cuts weaken the US dollar, which strengthens demand for gold, keeping its price elevated in the short term.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) – Technical Analysis

Gold continues its upward trajectory, trading at $2,859.85, marking a 0.58% gain. The bullish momentum is underpinned by strong buying interest, as the price holds firmly above the 50-day Exponential Moving Average (EMA) at $2,806.47, signaling a robust bullish bias.

The metal's resilience amid global economic uncertainty and fluctuating U.S. dollar strength has positioned it near key resistance levels, suggesting further upside potential.

From a technical standpoint, the immediate resistance stands at $2,862.44, a critical level that, if breached, could open the path toward $2,877.51. A sustained move above this mark would likely test the next significant barrier at $2,894.42, reinforcing the bullish outlook.

Conversely, on the downside, immediate support is observed at $2,826.15. A break below this could expose gold to deeper pullbacks toward $2,808.32 and potentially $2,781.26, where buyers may re-emerge.

Momentum indicators support the bullish scenario, with the Relative Strength Index (RSI) maintaining levels above 60, reflecting strong buying pressure without signaling overbought conditions.

The Moving Average Convergence Divergence (MACD) also indicates positive momentum, as the MACD line stays above the signal line, hinting at sustained bullish energy.

Conclusion: The technical landscape favors a bullish bias with an entry price suggested above $2,850. Profit-taking is advisable around $2,870, while a prudent stop-loss placement at $2,835 helps manage downside risks amid potential volatility.

Related News

- GBP/USD Price Analysis – Feb 05, 2025

- EUR/USD Price Analysis – Feb 05, 2025

- GOLD Price Analysis – Feb 04, 2025

GOLD

JOIN LHFX TODAY

24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.

OPEN A NEW ACCOUNT