Gold Price Forecast: XAU/USD recovers above $2,800 as USD gives up some gains

• Gold price rebounds strongly above $2,800 as the US Dollar surrenders some gains.
• The imposition of tariffs by US President Trump on his North American peers and China has improved safe-haven demand.
• This week, investors will focus on the US NFP data for January.

Gold price (XAU/USD) recovers its intraday losses and turns positive in Monday’s North American session. The precious metal returns to near its all-time highs above $2,800 as the US Dollar (USD) surrenders some of its gains.

Earlier in the day, the Gold price slumped to near $2,770 after opening mildly higher. The precious metal faced selling pressure as the US Dollar had a gap-up opening after United States (US) President Donald Trump imposed 25% tariffs on Canada and Mexico and 10% on China and started the global trade war. He also reiterated his intentions of a slappy tariff on the Eurozone but didn’t provide much information.

Technically, geopolitical tensions improve the appeal of safe-haven assets such as Gold. However, the higher USD has capped Gold’s upside.

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, gives up gains after rallying to near 109.90 but is still 0.6% higher than its previous close.

This week, investors will pay close attention to the US Nonfarm Payrolls (NFP) data for January, which will be released at the end of the week. The NFP data will significantly influence market expectations for how long the Federal Reserve (Fed) will keep interest rates in the range of 4.25%-4.50%. Fed’s approach of keeping a restrictive monetary policy stance weighs on Gold.

Gold technical analysis

Gold price trades around all-time highs at $2,817.30. The upward-sloping 20-day Exponential Moving Average (EMA) near $2,735.70 suggests that the near-term trend is bullish.

The 14-day Relative Strength Index (RSI) oscillates in the 60.00-80.00 range, indicating a strong bullish momentum.

Looking up, the Gold price could rise to near $2,900. On the contrary, the January 27 low of $2,730.50 will act as support.

Gold daily chart