Gold resumed its upward momentum on Friday, buoyed by escalating trade tensions between the U.S. and China and a mixed U.S. employment report. Spot gold (XAU/USD) traded at $2,862, up 0.24%, as investors sought refuge in the precious metal.
President Donald Trump’s announcement of upcoming reciprocal tariffs on multiple countries bolstered bullion prices, reinforcing gold’s safe-haven appeal ahead of the weekend.
U.S. economic data showed that January’s Nonfarm Payrolls fell short of expectations, dropping from 256,000 to 143,000, below the projected 170,000. However, the Unemployment Rate declined to 4% from 4.1%, suggesting labor market resilience, which could deter the Federal Reserve from easing monetary policy. Following the report, gold briefly surged to a session high of $2,886 before retreating.
In global developments, the People’s Bank of China (PBoC) resumed gold purchases, increasing reserves from 73.29 million ounces to 73.65 million ounces, further supporting prices.
Meanwhile, Federal Reserve officials maintained a cautious stance. Minneapolis Fed President Neel Kashkari signaled a slightly lower policy rate, while Chicago Fed President Austan Goolsbee described the labor data as solid but hinted at a slower rate-cutting pace. Fed Governor Adriana Kugler added that inflation remains stagnant, justifying a hold on current policy rates.
Market Movers: Gold Gains as Dollar and Yields Rise
- The U.S. Dollar Index (DXY) climbed 0.32% to 108.04, recovering from a low of 107.51.
- The U.S. 10-year Treasury yield rose five basis points to 4.487%.
- U.S. real yields, which typically move inversely to gold prices, increased three basis points to 2.062%, presenting a headwind for XAU/USD.
- Futures markets are pricing in 39 basis points of Fed rate cuts in 2025.
Technical Outlook: Gold Eyes $2,900 Resistance
Gold remains in an uptrend but has struggled to break the psychological $2,900 level. The Relative Strength Index (RSI) indicates overbought conditions, suggesting possible price exhaustion.
Key support lies at $2,800, followed by $2,750 and the January 27 low of $2,730. On the upside, a decisive move above $2,900 could pave the way for resistance at $2,950 and $3,000.
