Gold prices are continuing their upward trajectory as markets eye the possibility of a record-breaking high of $2,956, with the yellow metal benefiting from both technical and fundamental factors. Early Thursday, gold extended its recent gains, buoyed by the ongoing global trade war and a cooling inflation report from the U.S.
The price of gold is forming higher highs and is in the process of carving out an ascending triangle pattern. If the metal can close above the record high of $2,956, it could confirm the bullish setup and set the stage for a move toward $2,970. If gold buyers push past this level, a test of the $3,000 psychological barrier seems increasingly likely.
Economic Calendar on 12/03/25
Trade War Fears Fuel Gold’s Momentum
Concerns about a global trade war resurfaced Thursday, overshadowing a temporary sense of relief triggered by Wednesday’s U.S. inflation data. Investors are on edge as tariffs imposed by Canada, China, and the European Union (EU) on U.S. goods continue to stoke fears of a prolonged trade conflict, which could dampen global economic growth.
As a result, investors are flocking to gold, traditionally seen as a safe-haven asset, while the U.S. dollar and Treasury bond yields face new headwinds. The brief respite for the U.S. dollar following the February inflation report was short-lived, as markets remain wary of the potential long-term effects of tariff-driven economic uncertainty.
Inflation Data Eases but Tariff Fears Persist
The U.S. Consumer Price Index (CPI) for February rose by 2.8% year-over-year, slightly lower than the expected 2.9%, and down from January’s 3%. Monthly CPI and core CPI increased by 0.2% during the same period, offering a temporary reprieve to U.S. economic concerns. This lower-than-expected inflation report has sparked speculation that the U.S. Federal Reserve could continue its rate-cutting cycle, making gold, a non-interest-bearing asset, more appealing.
However, the positive inflation data did not account for the impact of ongoing tariffs, raising fresh concerns over the potential for a recession. As markets digest these factors, the U.S. dollar’s weakness continues to support gold’s bullish momentum.
Looking Ahead: U.S. PPI Data and Trade Developments in Focus
All eyes are now on the upcoming U.S. Producer Price Index (PPI) data, as market sentiment continues to be influenced by global tariff developments. A weaker-than-expected PPI could put further pressure on the U.S. dollar, potentially extending gold’s rally.
With the trade war continuing to dominate headlines, the sentiment around global markets will likely continue to drive gold prices. Investors are closely watching for new developments in the tariff conflict, which could have significant implications for the broader economy and, consequently, the price of gold.