Gold price retakes $2,900 mark amid broadly weaker USD

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• Gold regained positive traction on Monday amid sustained USD weakness. 

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• Concerns about Trump’s tariffs further benefit the safe-haven XAU/USD pair. 

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• The fundamental and technical setup underpin prospects for additional gains. 

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Gold price (XAU/USD) attracts some dip-buying at the start of a new week and reverses a part of Friday's retracement slide from the vicinity of the all-time peak. The intraday positive move lifts the commodity back above the $2,900 mark and is sponsored by a broadly weaker US Dollar (USD). Apart from this, concerns that US President Donald Trump's reciprocal tariffs could heighten global trade tensions further benefit the safe-haven bullion. 

Meanwhile, the optimism over talks between the US and Russia aimed at ending the war in Ukraine does little to dent demand for the Gold price. Even the growing market acceptance that the Federal Reserve (Fed) would stick to its hawkish stance and keep interest rates on hold for an extended period fails to hinder the positive move. This, in turn, suggests that the path of least resistance for the non-yielding yellow metal remains to the upside.

Gold price continues to draw support from a weaker USD, trade war fears

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• The US Dollar languishes near its lowest level since December 17 touched in reaction to disappointing US Retail Sales data on Friday and helps revive demand for the Gold price. 

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• The US Census Bureau reported that Retail Sales declined by 0.9% in January, worse than the decrease of 0.1% expected and the 0.7% increase (revised from 0.4%) in December. 

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• The markets were quick to react and are now pricing in a rate cut by the Federal Reserve in September, rather than at the end of the year, further benefiting the precious metal. 

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• Kevin Hassett, Director of the US National Economic Council (NEC) said that a 40 basis points drop in 10-year US Treasury yield could be a sign the market expects lower inflation. 

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• US President Donald Trump ordered officials to formulate plans for reciprocal tariffs on countries that impose taxes on US imports, though he stopped short of announcing levies. 

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• Adding to this, Trump threatened that levies on automobiles would be coming as soon as April 2, fueling concerns about a global trade war and underpinning the XAU/USD. 

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• With US and Russian officials expected to hold talks in Saudi Arabia, Russian troops step up their attacks in eastern Ukraine, further boosting demand for the safe-haven commodity.

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Gold price remains on track to retest all-time peak, around the $2,942-2,943 area

From a technical perspective, the Relative Strength Index (RSI) on the daily chart has eased from overbought territory, while other oscillators retain their positive bias. This, in turn, validates the near-term constructive outlook for the Gold price and supports prospects for a further appreciating move. That said, any subsequent strength might face a barrier near the $2,925 horizontal zone ahead of the all-time peak, around the $2,942-2,943 region. Some follow-through buying beyond the latter would be seen as a fresh trigger for bulls and pave the way for an extension of the recent well-established uptrend witnessed over the past two months or so.

On the flip side, the $2,885 region could offer immediate support ahead of last week's swing low, around the $2,855 zone. Any further decline could be seen as a buying opportunity near the $2,834 area, which, in turn, should help limit the downside for the Gold price near the $2,815 region. This is followed by the $2,800 mark and the $2,785-2,784 support, which if broken decisively would set the stage for a meaningful corrective fall.