Gold Price Hits New Record: Tariff War and Trump’s Gaza Comments Weigh In

Gold price rose to record highs on Wednesday on safe haven demand as trade tariff wars and Middle East geopolitics took center stage. The yellow metal rose to $2,865 per ounce at the spot market in the Asian trading session, recording 0.5% in intraday gains. Furthermore, the metal is on course to register the fifth successive day of gains, underlining a strong bullish sentiment.

Tariff War and Trump’s Comments on Gaza Propel Gold Price

China announced retaliatory counter-tariffs against a raft of imports from the United States, including coal, liquid natural Gas (LNG), farm equipment among others. US President Donald Trump announced a 10% tariff on Chinese imports over the weekend, but paused 25% tariffs against goods from Mexico and Canada for at least 30 days following a breakthrough in negotiations.

In addition, China has notified several US companies, including tech giant, Google that they could be targeted in an expanded tariff bracket. US tariff imposition started on Tuesday, and President Trump’s statement that he was in “no hurry” to negotiate with Chinese counterpart, Xi Jinping could escalate the war. However, China has delayed the tariff implementation until February 10 to give room for negotiations.

The tariff war pitting the world’s top two economies could have far-reaching effects across the globe, raising the appetite for safe haven gold. Meanwhile, President Trump’s comments calling for a US takeover of the Gaza strip could trigger a new crisis in the Middle East, and potentially threaten the recently-signed ceasefire between Israel and Hamas. Leaders from the MENA region are expected to respond to those comments which could add propulsion to the price of gold.

Gold Price Prediction

Gold price pivots at $2,845 and the upside will prevail if action stays above that level. The momentum will likely meet the first resistance at $2,865. However, an extended control by the buyers could clear that hurdle and potentially test $2,875.

On the other hand, the momentum will shift to the downside if XAUUSD breaks below $2,845. With the sellers in control, gold price is likely to move lower to the first support at $2,835. Meanwhile, the upside narrative will be invalid if the price breaks below that level. Also, the resulting momentum could take the commodity’s price lower to test $2,830.

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