Gold prices continue to hover near record highs, reaching $2,956 in early trading on Monday during the North American session. The surge comes as the US dollar remains strong and Treasury yields show minimal movement, reinforcing gold’s appeal as a safe-haven asset.

Market Uncertainty Bolsters Gold Prices

Ongoing economic and geopolitical uncertainty has kept gold prices elevated, with investors closely monitoring trade policies proposed by US President Donald Trump. As February draws to a close, tensions among the US, Canada, and Mexico are expected to escalate following Trump’s decision to delay tariffs. The three countries have agreed to collaborate on combating fentanyl trafficking and curbing illegal immigration, adding another layer of complexity to trade relations.

Meanwhile, the US 10-year Treasury yield has dipped slightly by one basis point to 4.443%, providing additional support for gold. Real yields on 10-year Treasury Inflation-Protected Securities (TIPS) remain firm around 2.017%, limiting downside pressures on the precious metal.

Mixed US Economic Data Influences Market Sentiment

Recent economic indicators from the United States have presented a mixed picture. Last Friday’s business activity reports showed that the S&P Global Manufacturing PMI expanded, signaling strength in the industrial sector. However, the Services PMI contracted, raising concerns about consumer-driven economic growth. Inflation expectations also edged higher, while consumer sentiment, as reported by the University of Michigan, showed signs of deterioration.

With these economic factors in play, the gold market appears poised to extend its rally, despite signs of exhaustion among bullish traders. Technical indicators, such as oscillators, suggest overbought conditions, potentially limiting further upside movement in the near term.

XAU/USD Technical Outlook

Gold’s broader uptrend remains intact, though further price increases may occur at a measured pace rather than through sharp rallies. The Relative Strength Index (RSI) indicates overbought conditions, suggesting that upward momentum could slow, potentially leading to a retracement.

Should XAU/USD break above its all-time high of $2,956, the next significant resistance level is expected at $3,000. Conversely, a decline below the February 21 low of $2,916 could open the door for a pullback toward $2,900 in the near term.