HG MARKETS:

Gold prices (XAU/USD) have been rising for the third day in a row on Wednesday, breaking past $2,750 and hitting their highest point since early November during the Asian trading session. This increase is mainly due to concerns about US President Donald Trump’s threat to impose tariffs on Canada and Mexico, which led investors to seek safer assets like gold. Additionally, expectations that the Federal Reserve may cut interest rates twice this year are also boosting gold’s appeal, as lower rates make gold more attractive.

Even though the overall market mood is more optimistic, gold’s price increase has remained strong. A small bounce in US Treasury yields, which helped the US Dollar recover slightly from a two-week low, hasn’t been enough to reverse the positive outlook for gold. Gold’s breakout above the $2,720 resistance level strengthens the chances for further gains, with geopolitical risks and potential trade tensions pushing investors toward safe-haven assets like gold.

Cooling inflation in the US has also led to expectations that the Federal Reserve may lower interest rates this year, which would weaken US bond yields and support higher gold prices. Meanwhile, global factors like the Israel-Hamas ceasefire and hopes that President Trump might ease sanctions on Russia in exchange for progress in Ukraine have kept market sentiment positive, but haven’t overshadowed gold’s upward movement. Investors are now awaiting the Bank of Japan’s decision on Friday, which could cause more market volatility.

Technically, gold’s rise above the $2,720 resistance level is seen as a positive sign. Indicators on the daily chart suggest there’s still room for further gains, with gold possibly targeting its all-time high around $2,790. However, if the price corrects, it could find support around $2,725-$2,720. Stronger support is seen at $2,700-$2,690, and a drop below this range might lead to more selling, pushing gold towards $2,660-$2,625, where key support levels are located.