• Gold price regains $2,900 as looming Trump’s reciprocal tariffs risk a trade war.
• The US Dollar stays subdued despite hot US CPI inflation data and hawkish Fed Chair Powell.
• Gold price sees dip-buying amid a 4H bullish technical setup ahead of US PPI data.

Gold price is trying to hold above the $2,900-mark early Thursday, having witnessed intense volatility a day ago. The focus once again remains on the US fundamentals and US President Donald Trump’s tariff plans for a fresh boost to Gold prices.

Gold price capitalizes on Trump’s tariffs-led nervousness

White House noted late Wednesday that the earlier announced reciprocal tariffs by President Trump could come by on Thursday, keeping the haven demand for the traditional safety net – Gold price – intact.

However, Gold traders remain wary of creating additional bullish positions in the bright metal amid increased expectations that the Federal Reserve (Fed) could pause its easing trajectory until the third quarter of this year. The hotter-than-expected January US Consumer Price Index (CPI) data published on Wednesday reinforced the hawkish bets surrounding the Fed’s interest rates outlook.

The annual headline CPI increased 3% in January, up from 2.9% the previous month. The core inflation unexpectedly rose to 3.3% over the year in January versus December’s 3.2% growth. Speaking with US lawmakers Wednesday, Fed Chair Jerome Powell said the latest data show we’re close but not there on inflation, implying that the Fed is in no rush to cut rates further.

The Fed’s hawkishness triggered a sharp rally in the US Treasury bond yields on Wednesday, fuelling a steep decline in Gold price to near the $2,865 region. Gold buyers quickly jumped in on bargain hunting, lifting the yellow metal to settle back above $2,900. Gold is widely considered a hedge against inflation, which remains at the top of the market’s concerns.  

Attention now turns toward the US Producer Price Index (PPI) data due later in Thursday’s American session for further cues on the Fed’s policy stance, which could influence the non-interest-bearing Gold price.

However, any downside in Gold price will likely remain cushioned as Trump’s reciprocal tariffs could raise tensions surrounding a potential trade war worldwide. The European Union (EU) will prioritize negotiations over retaliatory countermeasures to avoid a damaging trade war, officials signalled earlier on Wednesday.

Gold price technical analysis: Four-hour chart

Following a brief dip below the critical 21-four hourly Simple Moving Average (SMA), now at $2,897, Gold price managed to recapture the latter, fuelling a gradual recovery.

The Relative Strength Index (RSI) holds well above the midline, currently near 63.50, backing the upside potential.

The further recovery will need acceptance above the $2,910 round level on a four-hourly candlestick closing basis.

The next topside barrier is aligned at the record high of $2,943.

On the flip side, a four-hourly candlestick closing below the 21-four hourly SMA at $2,897 will reinforce the selling interest, calling for a test of the 50-four hourly SMA at $2,866.

The last line of defense for Gold buyers is the 100-four hourly SMA at $2,816.