Gold price (XAU/USD) rises sharply to $3,045 on Wednesday amid intensifying global trade tensions. The surge follows the official rollout of U.S. Tariffs, which renewed investor interest in the precious metal as a safe-haven asset. Despite market hopes earlier this week for a possible 90-day pause in tariffs, the White House firmly dismissed such reports as false, fueling fresh volatility.
Key Takeaways
- Gold price (XAU/USD) rises to $3,045 as trade tensions fuel investor caution.
- U.S. President Trump’s tariffs come into effect, deflating hopes of a temporary pause.
- Expectations rise for Fed rate cuts, enhancing Gold’s appeal as a non-yielding asset.
- Indian gold loan sector faces uncertainty as RBI plans new regulatory review.
- Chinese ETF inflows signal strong retail demand driven by market turbulence.
Market Overview: Tariff Shock and Fed Speculation Stir Risk Sentiment
Global markets reacted sharply on Wednesday as Gold price (XAU/USD) surged following tariff enforcement. Hopes had briefly surged earlier this week when several media outlets suggested President Trump might delay tariffs for all but China. However, White House officials later called this narrative “fake news,” reaffirming the administration’s stance on trade enforcement.
“The rebound in Gold highlights rising investor concern over tariff risks and changing global trade dynamics,” said Christopher Wong, strategist at Oversea-Chinese Banking Corp, as reported by Bloomberg. He added that Gold continues to serve as a reliable hedge during times of economic disruption.
Additionally, speculation is mounting that increased volatility may lead the Federal Reserve to accelerate interest rate cuts. This is significant, as lower rates enhance Gold’s attractiveness by reducing the opportunity cost of holding it.
Fed Outlook and Regulatory Buzz: Key Drivers of Market Sentiment
- The CME FedWatch Tool shows a dramatic rise in expectations for a Fed rate cut in May, now standing at 53.5%—a huge leap from 10.6% just one week ago.
- For June, a 100% probability is now priced in, with over half of analysts forecasting a 50-basis point cut.
- In India, shares of Muthoot Finance tumbled by 6.3% after the central bank announced a thorough review of gold loan guidelines, sparking concerns of intensified competition.
- Bloomberg reports that Chinese investors funneled record amounts into Gold-backed ETFs last week, with four major funds receiving 7.6 billion yuan ($1 billion) in total inflows.
These movements reflect the growing uncertainty surrounding global economies, prompting investors to flock to Gold as a safeguard against future shocks.
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Gold Price Technical Analysis: Pushing Past Resistance Levels
The recent upswing in Gold price (XAU/USD) can be attributed to the markets being caught off guard by the actual enforcement of tariffs. Investors, anticipating a delay, were surprised, leading to a renewed rush into safe-haven assets.
On the technical front:
- Immediate resistance sits at $3,041, a level currently under testing.
- Resistance also stands at $3,057, a notable level since March 20, followed by $3,089 and the record peak of $3,167.
- Support levels include $3,004 and the psychological $3,000 zone. Below that, important support levels include $2,964, $2,955, and S2 at $2,945, just above the 55-day SMA of $2,935.
Price action continues to suggest strong demand at dips, supported by global risk aversion and technical buying momentum.
Conclusion: Gold to Stay in Demand Amid Global Uncertainty
In summary, the Gold price (XAU/USD) is climbing as geopolitical tensions, central bank actions, and regulatory shifts align to increase its appeal. With the Fed leaning toward rate cuts and global markets facing instability, demand for Gold is likely to remain firm in the short to medium term. Investors should watch upcoming Fed decisions and trade-related developments for further cues.
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