Gold Continues Record Rally Amid Global Uncertainty
The gold price (XAU/USD) soared to a new all-time high of $3,080 during early European trading hours on Friday. The rally is fueled by mounting global trade tensions, particularly after U.S. President Donald Trump’s latest announcement of a 25% tariff on foreign-made vehicles, set to take effect on April 3. As investors brace for the economic impact, safe-haven demand for gold continues to rise.
Despite a modest uptick in the U.S. Dollar Index (DXY), gold remains well-supported thanks to fears of a global slowdown and increasing speculation that the Federal Reserve may resume rate cuts as early as June 2025.
📰 Key Market Drivers Supporting Gold’s Surge
- Trump’s Tariff Shock: A new 25% tariff on imported cars and trucks has widened the U.S.-led global trade war. With reciprocal tariffs from other nations expected next week, investors are hedging against uncertainty.
- Fed Rate Cut Expectations: Markets are pricing in potential rate cuts by the Fed in June amid fears that Trump’s trade policies may stunt U.S. growth.
- U.S. Economic Data Mixed:
- Q4 GDP revised up to 2.4% (vs. 2.3% forecast).
- Initial jobless claims fell slightly to 224K.
- Fed officials maintain a cautious stance amid policy uncertainty and rising inflation risks.
- Safe-Haven Inflows: Traders continue piling into non-yielding assets like gold, especially with global equities under pressure.
📊 Gold Technical Analysis: Uptrend Intact, But RSI Signals Overbought Zone
The gold market trend remains firmly bullish, driven by both technical strength and fundamental support. However, the Relative Strength Index (RSI) on the daily chart is now in overbought territory, suggesting that a short-term correction or consolidation could be on the cards.
🔍 Key Support and Resistance Levels
- Immediate Resistance: $3,080 (New record high)
- Initial Support: $3,050–3,048 zone
- Next Support Zones:
- $3,036–3,035
- $3,020–3,019
- $3,000 (Psychological level and pivot point)
A decisive break below the $3,000 handle may trigger technical selling, exposing gold to further declines toward $2,980 and $2,954 levels.
📅 What’s Next? All Eyes on U.S. PCE Inflation Data
The market focus now turns to the U.S. Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred inflation gauge, due for release later today. The outcome will likely shape the Fed’s interest rate trajectory and influence the next leg of gold’s move.
If the PCE data disappoints, reinforcing dovish Fed expectations, gold may continue its climb toward $3,100 and beyond. On the other hand, strong inflation data could limit near-term gains and trigger profit-taking.
📌 Conclusion
With rising geopolitical risk, mounting trade tensions, and growing speculation around Fed policy easing, gold’s long-term bullish trend remains intact. While overbought conditions suggest short-term caution, dips toward the $3,050–$3,000 support range are likely to attract buyers.
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