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Gold and Silver Shine as Safe-Haven Demand Soars Amid US-China Trade Clash

Precious metals surge as investors flee risk assets; tariff war, stagflation fears, and Fed uncertainty fuel momentum

Gold and silver prices are surging in response to the deepening U.S.-China trade conflict, as investors seek refuge from rising volatility and a weakening economic outlook. President Donald Trump’s latest move to hike tariffs on Chinese imports to 145% ignited global market tremors, prompting an aggressive risk-off shift. In retaliation, Beijing fired back with 125% tariffs on U.S. goods, adding fuel to the fire of an already intense economic standoff.

While Trump has temporarily paused new tariffs above 10% for most trading partners, the carve-out excludes China—further isolating the world’s second-largest economy and signaling that tensions are far from cooling.

Gold & Silver Rally on Fear-Driven Flows

With inflation cooling and economic growth slowing, gold (XAU/USD) and silver (XAG/USD) have emerged as the go-to assets for global investors. The combination of declining U.S. CPI (2.4%) and slowing PPI (2.7%) has sparked concerns over stagflation—an economic scenario marked by stagnant growth and persistent price pressure. This backdrop has propelled gold to fresh record highs above $3,200, while silver eyes a breakout past $32.50.

The MOVE Index, a key gauge of bond market volatility, surged to 140, indicating heightened stress in fixed-income markets. Long-term U.S. Treasury yields climbed, reflecting fears that economic instability is on the horizon.

🔎 Technical Analysis Snapshot

🟡 Gold (XAU/USD)

Daily Chart Outlook:
Gold continues its powerful uptrend after bouncing from the 50-day SMA. The current breakout suggests a push toward the $3,300–$3,350 region, completing a projected move from the ascending broadening wedge. RSI supports the trend with bullish confirmation near the mid-range.

4-Hour Chart:
Prices broke out of the ascending channel at $3,200, reinforcing upward momentum. Despite slightly overbought conditions, bulls appear in full control.

⚪ Silver (XAG/USD)

Daily Chart Outlook:
Silver rebounded from a key support zone around $27–$27.50, reclaiming the 200-day SMA. A close above $35 could open a runway to the $40 mark, targeting levels not seen since 2020.

4-Hour Chart:
The rebound from $28 is gaining traction, with resistance at $32.50 now in focus. A clean breakout will confirm bullish continuation.

💵 US Dollar Index (DXY)

Daily Chart Overview:
The Dollar broke down below major support at 100.65, and now eyes the 97–96 zone. Even with an oversold RSI, momentum points to continued weakness.

4-Hour Chart:
A descending channel dominates, with prices hovering near 99. Minor bounces are possible, but the broader trend favors bearish continuation.

🔍 Outlook: Precious Metals in the Spotlight

As geopolitical risks and economic policy uncertainty mount, gold and silver are experiencing a renaissance. Trump’s influence on the Federal Reserve—especially after the Supreme Court temporarily allowed executive interference with independent agencies—has stirred speculation that rate cuts could arrive as early as May.

Even with brief rebounds in equities on tariff relief for select nations, the broader market outlook remains fragile. Precious metals are poised to benefit from the current backdrop of:

Escalating global trade disputes
A softening U.S. Dollar
Concerns about central bank credibility
Rising risk aversion in equities and bonds

If trade tensions persist and monetary policy turns increasingly dovish, gold and silver may continue climbing to new multi-decade highs in the months ahead.

Yasher Rizwan