Gold price builds on its intraday ascent beyond $2,750 despite modest USD strength

• Gold price scales higher for the third straight day amid the global flight to safety.
• Bets for more rate cuts by the Fed also benefit the non-yielding yellow metal.
• A modest USD bounce and the risk-on mood do little to cap the XAU/USD pair. 

Gold price (XAU/USD) prolongs its uptrend for the third straight day on Wednesday and climbs further beyond the $2,750 level, touching its highest level since early November during the Asian session. US President Donald Trump’s threatened tariffs turn out to be a key factor driving flows towards the safe-haven precious metal. Adding to this, bets that the Federal Reserve (Fed) will cut rates twice this year offer support to the non-yielding yellow metal.

The intraday positive move, meanwhile, seems rather unaffected by the prevalent risk-on mood. Even a modest bounce in the US Treasury bond yields, which assists the US Dollar (USD) in staging a modest recovery from a two-week low, does little to dent the bullish sentiment surrounding the Gold price. This, along with the overnight breakout above the $2,720 supply zone, supports prospects for a further near-term appreciating move for the XAU/USD.

Gold price remains well supported by Trump’s tariff threats, Fed rate cut bets

• Hours after taking the oath, US President Donald Trump said that he intends to impose 25% tariffs on Canada and Mexico, and the target date for tariffs would be as soon as early February. 
• Trump’s tariff remarks sparked concerns about a fresh wave of global trade war, boosting demand for safe-haven assets and lifting the Gold price to its highest level since early November. 
• Signs of abating inflation in the US revived bets that the Federal Reserve may not exclude the possibility of rate cuts by the end of this year, which dragged the US Treasury bond yields lower. 
• This, along with the Israel-Hamas ceasefire agreement, and hopes that Trump might relax curbs on Russia in exchange for a deal to end the Ukraine war, remain supportive of the risk-on mood.
• The US Dollar gains some positive traction during the Asian session on Wednesday and moves away from a two-week trough that was retested on Tuesday, which might cap gains for the XAU/USD. 
• Investors now look forward to the highly-anticipated Bank of Japan decision on Friday, which could infuse volatility in the financial markets and influence the safe-haven precious metal.
• Apart from this, the flash PMI prints would offer a fresh insight into the global economic health and provide some meaningful impetus to the commodity during the latter half of the week. 

Gold price bulls retain control; Monday’s breakout above $2,720 hurdle in play

From a technical perspective, the overnight breakout through the $2,720 supply zone was seen as a fresh trigger for bullish traders. Given that oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone, a subsequent strength beyond the $2,748-2,750 hurdle should pave the way for additional gains. The Gold price might then aim towards challenging the all-time peak, around the $2,790 area touched in October 2024.

On the flip side, any corrective pullback might now be seen as a buying opportunity and remain limited near the $2,725-2,720 region. The next relevant support is pegged near the $2,700-2,690 area, which if broken decisively might prompt aggressive technical selling and drag the Gold price to the $2,660 zone en route to the $2,625 confluence. The latter comprises the 100-day Exponential Moving Average (EMA) and an ascending trend-line extending from the November swing low, which, in turn, should act as a key pivotal point and help determine the next leg of a directional move for the XAU/USD.