Gold (XAU/USD) price faded earlier gains and maintained modest gains in intraday trading ahead of the US session trading on Tuesday, trading near $3,132. The precious metal is trading slightly above $3,130 at the time of writing and a new all-time high was recorded at $3,149 on Tuesday. Investors are still seeking refuge in the Gold market with US President Donald Trump scheduled to announce reciprocal tariffs on Wednesday around 19:00 GMT.
Meanwhile, traders are bracing for a tough trading week in terms of US economic data. Ahead of the Nonfarm Payrolls release scheduled for Friday, markets will be waiting for several data releases. Overnight, in an interview with CNBC, Richmond Federal Reserve (The Fed) President Thomas Barkin said that economic data is shrouded in a thick fog and it is not clear for policymakers to read where interest rate should go, while recession fears remain, CNBC reported.
A light ‘parental advice’ on the sustainability of the Gold rally makes sense at this point. With the main driver of the Gold surge due to be officially announced, the ‘buy the rumor, sell the fact’ rule should be considered. The risk is that after the reciprocal tariffs come into effect on Wednesday, only a easing of profit-taking in Gold may occur after a separate trade agreement and partial unwinding of positions, occurs.
On the upside, the daily R1 resistance at $3,142 was tested in Tuesday’s sharp rally. The R2 resistance at $3,160 could still be a target in the US trading session later as the European trading session shows Gold price action stabilizing a bit. Further, the broader upside target is at $3,200.