Gold – An Important Week Ahead

Gold prices have risen steadily to start 2025 supported by central bank buying and its popularity as a safe haven hedge against general market uncertainty created by President Trump’s pursuit of aggressive tariffs on key trading partners, increased government spending, a slowdown in global growth and geopolitical risks.

All of this led to Gold touching a new record high of 2887 on Friday, which as it so happens is an important Fibonacci Extension level (more on this in the technical update below), before succumbing to a fresh bout of dollar strength after the release of the latest US Non-farm Payrolls report on Friday. This outlined a resilient labour market, adding weight to the Federal Reserve’s decision to pause further interest rates cuts.

An Important Week Ahead:

Also on Friday, President Trump said he would unveil plans for reciprocal tariffs that would affect “everyone”. Late last night he backed this statement up by announcing plans to impose 25% tariffs on all imports of steel and aluminium into the US. This broadening of tariffs and its threat to relationships with some of the country’s biggest trading partners has already seen Gold print a new high at 2897 (at time of writing) this morning.

Details on the start date and implementation of these tariffs remains unclear, as does whether this is the only new tariff announcement this week, or there are more tariff shocks to come. Gold traders are likely to remain sensitive to headlines clarifying these points.

They will also have to contend with the latest series of US inflation, with CPI released on Wednesday at 1330 GMT and PPI released on Thursday at the same time. Any sign that US inflation isn’t trending back to lower levels could boost the dollar again and put pressure on Gold prices next week, or vice versa.

Moving on to the Technicals:

Since trading to a low of 2583 on December 19th 2024, Gold has enjoyed a period of strength. During this time, the advance has been able to breach important resistance levels, such as, 2721 which was the November 25th 2024 bounce failure high, then 2790, which at that time was the all time high from October 31st 2024.

This reflected positive sentiment within the latest price activity, and this morning’s 2897 print is at the time of writing, another new all-time high. However, this move is currently challenging an important resistance level that traders may be focused on, on a closing basis, which stands at 2887, from which a setback did materialise into the end of last week.

This 2887 level is equal to the 38.2% Fibonacci extension of the sell-off between the significant high at 2790 from October 31st and the significant price low of 2537, posted on November 14th 2024. It may be worth watching how this resistance level performs on a closing basis over coming sessions.



During price strength, such as that seen recently in Gold, Fibonacci extensions can be used to gauge potential resistance levels that may cap any rallies as an asset trades into new higher ground. These levels are derived by using the same ratios as Fibonacci retracements, but are calculated using a previous correction in price, and projected higher, from the previous high.

As such, 2887 might continue to be an important resistance level to the current Gold advance on a closing basis, and while much will depend on future price trends and market sentiment, closing breaks might lead to a further phase of strength to even higher levels. We may then focus on resistance at 2917, which is equal to the 50% extension, or even the 61.8% level, which stands at 2945.

Potential Support:

Of course, it is equally possible resistance is successful in continuing to hold current price strength on a closing basis, even turn it lower, with that in mind it is important to identify some potential support levels that if broken may lead to a more extended sell-off in price.

Thursday’s low stands at 2834, marking a level where buyers have recently been found to hold price weakness, turn it higher and then post new all-time highs.

If seen, this level being broken on the downside might point to a deeper retracement of the January 27th to February 7th price advance, and that could mean the 61.8% Fibonacci retracement, which stands at 2793, could act as a possible lower support level, if price corrections materialise.

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