- Gold prices are the largest and largest range in the middle of increasing demand for safe shelters against mutual mutual tariffs from Trump.
- USD beats fresh YTD low, but US bond yields and Fed rates – cut-cut bets have reduced, further supporting precious metals.
- However, the Bulls pause after a break and fail to place new bets in the middle of Barical Deviation on the RSI.
Gold prices (XAU/USD) surged to a new all-time high during the Asian session on Thursday as investors sought safe-haven assets amid heightened market uncertainty. The risk-off sentiment was triggered by U.S. President Donald Trump’s announcement of sweeping reciprocal tariffs on Wednesday evening, raising concerns over global economic growth and the potential for a U.S. recession. This led to a significant downturn in equity markets, further driving demand for gold.
Additionally, the market’s flight to safety and expectations that a tariff-induced economic slowdown in the U.S. could prompt the Federal Reserve (Fed) to restart its rate-cutting cycle contributed to a sharp drop in U.S. Treasury bond yields. As a result, the U.S. Dollar (USD) weakened, nearing levels last seen in March, which provided additional support for gold prices. However, overbought conditions have limited the metal’s further upward movement.
Gold Extends Rally as Trump’s Tariffs Fuel Global Risk Aversion
- US President Donald Trump has sent shockwaves through global financial markets, imposing a basic tariff of 10% on all imports and higher tasks on some of the country’s largest trading partners. In response, China’s Commerce Ministry declared it would decide to take measures to protect his rights and interests.
- Development increases the risks of long-term trade wars that could hinder world free trade and the negative impact on the global economy. This has led to an increase in demand for traditional assets in safe shelters. Separately, the development of heavy USD sales will push Thursday’s gold price to a new record high.
- Investors now seem worried that Trump’s protectionist policies could potentially send the US economy into a recession and are pricing in a 70% chance that the Federal Reserve (Fed) will lower borrowing costs in June. Moreover, the anti-risk flow drags the US Treasury bond yields lower across the board, undermining the USD.
- Economic data shows the US ADP reported Wednesday that private employers added 155,000 jobs in March. However, this has hardly impressed the US dollar bull, as he is concerned about the economic outcomes of Trump’s trade policy.
- Traders are currently looking forward to the usual weekly unemployment claims and US Economic Docket, the publication of USM Services PMI. Apart from that, trade-related headlines could impact USD and offer XAU/USD couples in front of the closely-respected US non-farm pay and salary account report (NFP) on Friday.
Gold Price Pauses to Consolidate Gains as Overbought RSI Signals Caution
From a technical standpoint, the Relative Strength Index (RSI) on the daily chart indicates overbought conditions, which may discourage XAU/USD bulls from initiating new positions. As a result, it would be wise to wait for a brief period of consolidation or a slight pullback before considering further upside in the ongoing multi-month uptrend. However, the overall market structure continues to favor bullish traders, suggesting that gold’s price trajectory remains upward.
Any corrective decline below the Asian session low, near the $3,123 level, could present a buying opportunity. This should help limit further downside, with the $3,100 zone now serving as a key support level. A decisive break below this point, however, could trigger profit-taking and push gold toward $3,076—Monday’s weekly swing low—before extending to the $3,057–3,058 region, the $3,036–3,035 zone, and the psychological level of $3,000.
