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• Gold (XAU/USD) has broken above $2900/oz, fueled by safe-haven demand amid new tariff announcements.
• The World Gold Council report indicates that geopolitical risks significantly contribute to gold’s rise. Additionally, European ETF inflows have been substantial.
• A sharp rise in US inflation could either push prices down or further increase safe-haven demand, creating a complex market situation.

Risk aversion continued at the start of another week following Donald Trump’s pledge of blanket tariffs of 25% on steel and aluminum imports to the US. The markets opened with gaps as a result while safe haven flows continued to gain traction in the face of uncertainty.

Latest Tariff Pledges

President Donald Trump is expected to sign an order on tariffs later on Monday or Tuesday, a source said. This move could raise the chances of a trade war involving multiple countries.

Trump announced on Sunday that he will add a 25% tariff on all steel and aluminum imports to the U.S., in addition to existing duties. He also plans to introduce more tariffs later this week to match the tariffs other countries place on U.S. goods. Trade partners have warned they might retaliate. Details of the order Trump will sign are not yet available.

Source: LSEG

During his first term starting in 2017, Trump set tariffs of 25% on steel and 10% on aluminum. However, he later gave exemptions to some countries like Canada, Mexico, and Australia. He also made deals with Brazil, South Korea, and Argentina to allow certain amounts of steel and aluminum without tariffs, based on their trade levels before the tariffs. Later, President Biden made similar duty-free agreements with Britain, Japan, and the EU.

Gold Council Report and ETF Flows

Gold enjoyed a stellar start to 2025 with January seeing the precious metal return gains of around 6.6%. This has continued in the early part of February with safe haven flows remaining strong and keeping Gold prices supported.

The World Gold Council report for January provided some interesting insights into the rise of Gold prices. A lot of which we have discussed but I thought it was worth a look.

The World Gold Councils Gold Return Attribution Model (GRAM) shows that most factors had a positive effect, including a big increase in the Geopolitical Risk Index (GPR). However, the strong US dollar in December held back returns slightly due to its delayed impact.

Source: Bloomberg, World Gold Council

On the ETF front, 2025 kicked off with positive flows, led by Europe, while North America saw outflows. Following the second consecutive monthly inflow and supported by a higher gold price, global gold ETFs’ total AUM rose to US$294bn and holdings bounced to 3,523t.

European ETF flows reached their highest level in years with inflows of +US$3.4bn, 39t which was likely supported by the European Central Bank (ECB) rate cut, causing bund yields to drop sharply throughout the month.

These developments look set to continue and thus why many are now pricing and upgrading their Gold forecasts for 2025. $3000/oz now seems within reach, with the question being when will it be reached?

US CPI Data This Week

On the data front, US inflation is the biggest data event this week which could have an impact on Gold prices. However, despite last week’s uptick in inflation expectations as revealed by the Michigan Sentiment Index, I think it may be too soon for a significant change in inflation.

I do not expect a significant uptick or shot yet, as it will require more time before the impacts of tariffs are fully felt and absorbed by the US economy.

If there is a significant uptick in inflation this could send Gold prices lower. Market participants will be concerned about an uptick in inflation before the impact of tariffs has been felt and this could spook markets.

This could work both ways though as a rise in inflation could spook markets and also lead to increased demand for safe havens. This could then net-off and keep Gold prices elevated.

Technical Analysis – Gold (XAU/USD)

Gold prices have continued their advance and breached above the $2900/oz handle. The issue at present is that there is no historical price action to look at and find areas of resistance where price could potentially pullback.

As i mentioned in last weeks piece, pullback may prove short-lived at this stage with round numbers potentially key at this stage.

Gold (XAU/USD) Daily Chart, February 10, 2025

Source: TradingView (click to enlarge)

Looking at the four-hour chart below and Gold remains around overbought territory with immediate support resting at 2886 which was the Friday high.

A pullback here may provide potential bulls an opportunity to join the trend. A break of this level opening up a retest of the 2870 support before the 2850 handle comes into focus.

As mentioned, the upside does not have a lot to look at except today’s high at 2911 which could serve as resistance. A break of this level will bring focus to 2925, 2950 and 2975 as potential areas where price may experience a pullback.

Gold (XAU/USD) Four-Hour H4 Chart, February 10, 2025

Source: TradingView (click to enlarge)

Support

• 2900
• 2886
• 2770

Resistance

• 2911
• 2925
• 2950

• Gold broke resistance area
• Likely to rise to resistance level 2950.00

Gold continues to rise strongly after the earlier breakout of the resistance area located between the key resistance level 2878.00 (which stopped the price at the start of February) and the resistance trendline of the daily up channel from the start of this year.

The breakout of this resistance area accelerated the active short-term impulse wave 3 of the higher-order impulse wave (3).

Given the strong uptrend that can be seen on the daily and the weekly charts, Gold can be expected to rise to the next resistance level 2950.00, target price for the completion of the active impulse sequence (3).

• FTSE 100 index broke resistance level 8700.00
• Likely to rise to resistance level 8900.00

FTSE 100 index recently broke the resistance area between the key resistance level 8700.00 (which stopped the price at the end of January) and the resistance trendline of the daily up channel from December.

The breakout of this resistance area accelerated the active short-term impulse wave 3 of the higher-order impulse sequence C from last August.

Given the clear daily uptrend, FTSE 100 index can be expected to rise to the next resistance level 8900.00, target price for the completion of the active impulse wave (C).

Bitcoin bounced on Monday, benefiting from its status of alternative currency after new tariff announcement shook the markets and boosted safe haven demand.

Near term action is moving between ascending 100DMA (95210, which offers initial support and so far keeps the downside protected) and 55DMA (98865, guarding psychological 100K barrier).

Although talks about new tariffs and growing concerns about global trade war revived bulls, this was insufficient to spark stronger rally.

Markets await the action in overhauling the US crypto market regulations, as promised by President Trump, which most expect to be a key driver of bitcoin.

Overall picture remains bullish after bitcoin rose above 100K in post-election euphoria, though bullish sentiment slightly faded that resulted in prolonged consolidation within 90K-110K range.

Bitcoin is expected to remain bullishly aligned as long as price action stays above key 90K support zone, with break above 100K to firm the structure for eventual break above 110K and fresh acceleration into uncharted territory.

• Res: 98865; 100000; 100520; 102589
• Sup: 95210; 93432; 91054; 90000

Markets

US President Trump’s latest salvo of tariffs left global markets largely unfazed. It suggests they are either calling his bluff (having Canada and Mexico in mind) or are just tired already of running after each and every POTUS quote that’s hitting the screen. Trump this time targeted steel and aluminum, threatening a 25% levy on all imports but without saying when they would go into force. With Canada being the US’ main steel and aluminum partner, its currency is among the G10 underperformers today. USD/CAD is trading around 1.434. That’s only marginally up from 1.429 at the open, underscoring the aforementioned growing market apathy. Fall-out on the Mexican peso isn’t even worth mentioning. Mexico is the number two steel exporter (n° 3 for aluminum) to the US. There are little to no spillovers in emerging markets either, specifically in Central-Europe. CZK, PLN and HUF are all rising on a net daily basis. The dollar on a trade-weighted basis gapped a tad higher at the open before wiping out most gains again (DXY 108.22). EUR/USD isn’t going anywhere around 1.032.

What the series of tariff announcements do trigger are increasing concerns for US and by extension global growth, specifically through the rapid countermeasures that are being put in place. Canada, Mexico and China were cases in point while the EU has its anti-coercion instrument in place since Trump’s first term in 2016-2020. It’s what prompted a steady decline in (real) US yields towards their recent lows over the past couple of days & weeks. Friday’s strong payrolls report came to the rescue by lifting rates up to 8 bps at the front but part (around 3 bps) of that is evaporating again today. European rates ease less than 2 bps across the curve in sympathy. Stocks inch higher. Europe’s Stoxx600 hit a new record high. Wall Street opens higher as well.

News & Views

Statistics Norway today reported January headline CPI in the country printing at 0.2% M/M and 2.3% Y/Y (-0.1% M/M and 2.2% in December). CPI-ATE inflation (adjusted from tax changes and energy produces) reaccelerated to 0.1% M/M and 2.8% Y/Y from respectively -0.1% M/M and 2.7% Y/Y. Both figures were slightly above market expectations (2.2% headline, 2.6% core). In a monthly perspective, prices rose for food and drinks (+2.3%), housing related costs (0.9%), culture and leisure (0.5%) and other miscellaneous good and services (+1.4%). Monthly prices declined for clothing and footwear (-6.7%), household equipment (2.1%) and communications (-1.2%) amongst others. At its January policy meeting, the Norges Bank (NB) left its policy rate unchanged at 4.5%, but signaled a first rate cut for this cycle at the March 27 meeting. Today’s outcome is slightly higher than the projections in the NB monetary policy report of December (expected at 2.3% and 2.6% respectively). The NB anyway indicated that a restrictive policy will still be needed to keep inflation around the target. Markets after today’s CPI still see about a 90% chance of a 25 bps rate cut end March. However, the pace of/room for further rate cuts (seen at 3.8% in Q4 in the December policy report) might be less. February CPI still will be published before the March policy decision. The krone extended its recent rebound today gaining from EUR/NOK 11.63 to 11.57 currently.

Statistics Sweden reported a series of December activity data today. Orders in industry increased 2.0% M/M and were up by 5.8% Y/Y. A large part of the industrial subsectors recorded a positive M/M development, even as orders mainly increased in the export market while they were nearly unchanged on the domestic market. Export market increased by 6.8% and domestic market decreased by 0.1%. A similar trend was visible in industrial production. Private sector production rose 1.0% M/M and 3.0% Y/Y. However, this concealed industry production raising 5.7% M/M and 9.0% Y/Y. However production value in the services sector decreased 0.2% M/M to be only 1.6% higher Y/Y. Production in construction also rose 1.4% M/M and 3.4% Y/Y. Household consumption showed no strong momentum either, declining 0.3% M/M to be up only 0.7% Y/Y. Divergent signals from different sectors of the economy comes as the Riksbank reduced its policy rate to 2.25% end January. It indicated that the easing cycle might have come to and end depending on the outlook on inflation and activity going forward.

Daily Pivots: (S1) 150.73; (P) 151.57; (R1) 152.26; More...

Intraday bias in USD/JPY remains neutral for the moment. Focus stays on 38.2% retracement of 139.57 to 158.86 at 151.49. Strong bounce from there, followed by break of 153.70 support turned resistance, will retain near term bullishness, and turn bas back to the upside for retesting 158.86. However, sustained trading below 151.49 will suggest that whole rise from 139.57 has completed, and bring deeper fall to 61.8% retracement at 146.32 next.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). In case of another fall, strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.9059; (P) 0.9083; (R1) 0.9122; More…

USD/CHF is still extending the consolidation form 0.9200 and intraday bias remains neutral. Outlook stays bullish with 0.8956/64 support zone intact. On the upside, firm break of 0.9200/9223 will resume the whole rally from 0.8374 and carry larger bullish implication. However, sustained break of 0.8964 will be a sign of reversal and turn bias back to the downside.

In the bigger picture, decisive break of 0.9223 resistance will argue that whole down trend from 1.0342 (2017 high) has completed with three waves down to 0.8332 (2023 low). Outlook will be turned bullish for 1.0146 resistance next. Nevertheless, rejection by 0.9223 will retain medium term bearishness for another decline through 0.8332 at a later stage.

Daily Pivots: (S1) 1.2364; (P) 1.2417; (R1) 1.2458; More...

Intraday bias in GBP/USD stays neutral at this point, and outlook is unchanged. While corrective rebound from 1.2099 might still extend, upside should be limited by 38.2% retracement of 1.3433 to 1.2099 at 1.2609. On the downside, break of 1.2248 support will bring retest of 1.2099 low. Firm break there will resume whole fall from 1.3433. However, decisive break of 1.2609 will raise the chance of near term reversal, and target 61.8% retracement at 1.2923.

In the bigger picture, rise from 1.0351 (2022 low) should have already completed at 1.3433 (2024 high), and the trend has reversed. Further fall is now expected as long as 1.2810 resistance holds. Deeper decline should be seen to 61.8% retracement of 1.0351 to 1.3433 at 1.1528, even as a corrective move. However, firm break of 1.2810 will dampen this bearish view and bring retest of 1.3433 high instead.

Daily Pivots: (S1) 1.0289; (P) 1.0345; (R1) 1.0383; More...

EUR/USD is still bounded in consolidation from 1.0176 and intraday bias remains neutral. Outlook will remain bearish as long as 38.2% retracement of 1.1213 to 1.0176 at 1.0572 holds. On the downside, break of 1.0176 will resume whole fall from 1.1213. However, decisive break of 1.0572 will raise the chance of reversal, and target 61.8% retracement at 1.0817.

In the bigger picture, immediate focus is on 61.8 retracement of 0.9534 (2022 low) to 1.1274 (2024 high) at 1.0199. Sustained break there will solidify the case of medium term bearish trend reversal, and pave the way back to 0.9534. However, reversal from 1.0199 will argue that price actions from 1.1274 are merely a corrective pattern, and has already completed.