Gold’s price (XAU/USD) is rebounding above the $2,900 mark, trading at $2,910 as of Tuesday. The surge comes as the US Dollar (DXY) extends its decline, fueled by recent geopolitical and economic developments. A significant boost in market sentiment followed the announcement from German Green coalition leaders, confirming a deal on defense spending. This news strengthened the Euro (EUR) and weakened the US Dollar, creating favorable conditions for Gold’s rally.
Key Takeaways for Gold Price
- Gold Price Surge: XAU/USD moves past $2,900, hitting $2,910 amid a weakening US Dollar.
- Market Influence: German coalition’s defense spending deal strengthens the Euro, impacting Gold positively.
- Trade War Concerns: Ongoing tariff disputes between China, Canada, and the US contribute to market caution.
Market Context: Global Trade War Intensifies
Traders remain wary as trade tensions escalate between major global economies. Canada has imposed tariffs on various Chinese imports, prompting retaliatory tariffs from China on Canadian goods like canola oil. The US, under President Donald Trump’s administration, continues to push aggressive tariff policies, affecting global trade dynamics. If Canada and Mexico align with US measures, they could see tariff relief, which may further influence Gold’s price movement.
Gold’s Role in Currency Strength: Thai Baht Gains Momentum
The Thai Baht (THB) has experienced an uptrend, benefiting from Gold’s price increase. The currency has gained approximately 1.2% against the US Dollar this year, outpacing other Asian currencies. Thailand’s position as a key Gold-trading hub has enhanced confidence in its currency. However, strategists caution that this rally may not be sufficient to shield the economy from tariff-related risks.
Interest Rate Expectations: Fed’s Decision Looms
According to the CME FedWatch Tool, there is a 95% probability of no interest rate change at the Federal Reserve’s upcoming meeting on March 19. However, market sentiment indicates a growing 47.8% chance of a rate cut on May 7. Any shift in interest rate policy could directly impact Gold’s future price trajectory.
Technical Analysis: Key Levels to Watch
Gold has regained strength, erasing early-week losses and positioning itself back above critical technical levels.
- Resistance Levels:
- R1: $2,910 (current trading level)
- R2: $2,933 (last week’s high)
- Support Levels:
- S1: $2,880 (Monday & Tuesday support)
- S2: $2,873 (key psychological level)
- S3: $2,857 (March 3 low)
The weakening US Dollar has opened a pathway for Gold to climb higher. While an all-time high is not yet in sight, current momentum suggests stability above $2,900.
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