Gold Rises Nearly 1% as Dollar Weakens, Oil Futures Edge Lower

Market Overview

On Thursday, US President Donald Trump announced plans to impose reciprocal tariffs on imports, raising global trade concerns. However, reports suggested the tariffs might be delayed until at least April, sparking optimism that a trade war could be avoided. This drove the US dollar down nearly 1%, boosting gold prices by 0.80% to $2,927.31 per ounce, while oil futures declined slightly amid market uncertainty.

Gold Overview

Gold rose after Trump’s tariff announcement fueled trade war fears, but optimism over a potential delay in implementation helped stabilize market sentiment. Meanwhile, a weaker US dollar and falling Treasury yields provided additional support.

Gold – Key Drivers

Trump’s Reciprocal Tariff Plan:
- Trump confirmed plans to impose reciprocal tariffs on imports, aiming for equal tax rates between the US and its trade partners.
- He also considered taxing countries with VAT-based systems, but the timeline remains uncertain.
- CNBC analysts predict the tariffs may not take effect until April 1, giving room for negotiations and easing immediate trade tensions.
US Inflation Data & Fed Outlook:
- January Producer Price Index (PPI) showed moderate price increases, easing inflation fears.
- Morgan Stanley adjusted its core PCE inflation forecast from 0.4% to 0.3%, reinforcing expectations that the Fed could cut rates later this year.
Dollar & Bond Yields Drop:
- US Dollar Index fell 0.89%, closing at 107.05, its lowest level since Dec. 17.
- 10-year US Treasury yield dropped 10.1 basis points to 4.533%, further supporting gold prices.

Gold – Technical Analysis

Gold initially dipped but rebounded strongly, breaking resistance at $2,925.
In the US session, prices surged past $2,930, confirming a bullish trend.
Daily Chart: Gold remains in a strong uptrend, with support at $2,910 and resistance at $2,942–$2,952.

Gold – Today’s Focus

Primary strategy: Buy on dips, sell on rebounds.
Resistance Levels: $2,942–$2,952.
Support Levels: $2,920–$2,910.

Oil Overview

Oil prices traded choppily before closing slightly lower, weighed down by Trump’s trade policies and easing geopolitical tensions.

Oil Market Performance

WTI Crude (March): – $0.08 (-0.11%), closing at $71.29 per barrel.
Brent Crude (April): – $0.16 (-0.21%), closing at $75.02 per barrel.

Oil – Key Drivers

Trump’s Tariff Plan & Trade Negotiations:
- The proposed tariffs raised concerns over global trade disruptions, which could impact energy demand.
- However, a potential delay until April gave markets time to assess trade negotiations, limiting oil’s downside.
Russia-Ukraine Peace Talks & Supply Impact:
- Reports suggest Russia and Ukraine may be moving toward a peace agreement, easing supply disruption concerns.
- However, JPMorgan stated that Russian oil production is unlikely to rebound post-ceasefire, as output cuts are tied to OPEC+ commitments rather than sanctions.
IEA Monthly Report & Supply Growth Projections:
- The International Energy Agency (IEA) revised its 2025 global oil demand growth forecast upward, but noted supply growth could outpace demand.
- US and South American production increases are expected to offset Russia-related disruptions, adding to supply concerns.

Oil – Technical Analysis

Oil briefly tested $70 but rebounded, closing near $71.
Daily Chart: Oil remains below the 10-day and 20-day moving averages, signaling continued short-term weakness.
Key resistance remains at $72.5–$73.0, with support at $70.0–$69.5.

Oil – Today’s Focus

Primary strategy: Sell on rallies, buy near key support levels.
Resistance Levels: $72.5–$73.0.
Support Levels: $70.0–$69.5.

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Disclaimer

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