Precious metal benefits from dual catalysts: Geopolitical uncertainty and solana price prediction today, tomorrowshifting monetary policy outlook
Technical breakout suggests potential continuation of bullish momentum toward record highs
The gold market witnessed accelerated buying activity during Tuesday's Asian trading session, with spot prices reaching $2,726 per ounce - a level not seen since early November. This upward movement reflects growing investor concerns after former President Trump proposed new 25% tariffs on Canadian and Mexican imports, potentially reigniting global trade tensions. Market participants are increasingly allocating to traditional safe-haven assets as these developments coincide with changing expectations regarding Federal Reserve monetary policy.
Recent economic indicators showing moderating inflationary pressures have led traders to price in two potential Fed rate cuts later this year. This shift has pushed benchmark 10-year Treasury yields to three-week lows, decreasing the opportunity cost of holding non-interest-bearing gold. While the US dollar's partial recovery from recent lows and generally stable equity markets may temporarily limit gold's ascent, the overall technical and fundamental picture remains constructive for further gains.
Dual Catalysts Driving Gold's Breakout: Trade Policy Uncertainty Meets Dovish Fed Expectations
The proposed tariffs on North American trading partners represent the latest development in what analysts fear could become a broader protectionist agenda. Market memory of previous trade conflicts has triggered defensive positioning across commodities markets.
Last week's inflation data showed the slowest monthly core PPI increase since July, supporting arguments for monetary policy easing. Fed funds futures now indicate nearly 80% probability of at least one rate cut by September.
Gold's inverse correlation with real yields remains intact as inflation-adjusted 10-year Treasury rates approach 1.8%, near the lowest levels since the December FOMC meeting.
Secondary support comes from central bank demand, with official sector purchases continuing at elevated levels according to recent IMF data.
Technical Outlook: Bullish Breakout Opens Path Toward Record Highs
The precious metal's technical structure appears increasingly constructive after clearing several key resistance levels. The $2,720 area - which previously capped rallies in late December - has now transformed into support following this week's breakout. Momentum indicators remain favorably positioned, with the daily RSI at 62 - comfortably below overbought territory while maintaining an upward trajectory.
From current levels, traders are monitoring the $2,735 zone as the next technical hurdle, followed by the $2,746-2,748 region that marked the November peak. A sustained move above these levels could open the door for a retest of the all-time high near $2,790 recorded last October. On the downside, initial support now resides near $2,700, with more substantial buying interest likely emerging around $2,660 where the 50-day moving average converges with the late-December swing low.
Market participants await several potential catalysts this week including the Bank of Japan's policy decision and preliminary PMI data from major economies. These releases may provide additional clarity about global growth prospects and central bank policy divergence - factors that could influence gold's near-term trajectory as it consolidates recent gains.
