Gold price is trading at all-time highs near $3,220 amid growing concerns over a worsening US-China trade war.
This sharp rise in gold price is driven by intensified global economic uncertainty and a weakening US Dollar. The continued back-and-forth tariff actions between Washington and Beijing are unsettling investor confidence. At the same time, traders are closely watching inflation data and the Federal Reserve’s policy response.
Key Takeaways for Gold Price
- Gold price surges to near $3,220 amid global economic and trade war concerns.
- China increases tariffs on US goods to 125%, retaliating against US trade actions.
- Expectations for Fed rate cuts are growing as US inflation data shows signs of cooling.
- Traders anticipate further bullish momentum beyond $3,250.
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Global Market Context Drives Gold Rally
The gold price continues to climb, boosted by aggressive actions from China in response to US tariffs.
On Thursday, the US announced a 125% tariff on Chinese imports, marking a significant escalation. In response, China announced it would mirror the tariff increase, raising duties on US goods from 84% to 125%. These developments amplify fears of a global slowdown, driving demand for safe-haven assets like gold.
Meanwhile, the US Dollar is weakening across major currencies. The US Dollar Index is trading lower near 100.20 as investor confidence drops. The Dollar’s decline makes gold more attractive to investors holding other currencies.
Technical Outlook: Bullish Signs Dominate Charts
Gold’s momentum appears intact, with indicators signaling more room for upside in the short term.
- RSI (Relative Strength Index) hovers near 70, hinting at extended bullish strength.
- Immediate resistance stands at $3,250, a break above may push prices toward $3,300.
- Support sits around $3,200, followed by the 21-day SMA at $3,061 as the next cushion.
- Deeper corrections could test $3,000, viewed as a strong demand zone for buyers.
Economic Insights Fuel Rate Cut Expectations
Investors are now factoring in interest rate cuts from the Federal Reserve as early as June.
US March inflation data fell short of forecasts, with headline CPI easing to 2.4% year-over-year. Core CPI registered at 2.8%, falling short of forecasts. Month-over-month, headline CPI declined by 0.1%, while core CPI inched up by only 0.1%. These results suggest inflation may be cooling.
According to FOMC minutes, policymakers acknowledge the difficult balance between controlling inflation and supporting growth. Dallas Fed President Lorie Logan cautioned that tariffs may lead to job losses and force the Fed into defensive rate cuts.
Weekly jobless claims also climbed slightly to 223,000, further indicating economic weakness.
Geopolitical Moves and Market Sentiment
Amid these tensions, President Trump announced a 90-day delay on new tariffs for most trade partners.
This temporary measure is viewed as a positive step to stabilize markets. Mark Hackett of Nationwide remarked that the 90-day pause is a positive indication of successful negotiations with most countries.
However, China remains excluded from this relief, which means trade tensions remain high. Adding to global concern, China’s CPI dropped 0.1% in March, indicating deflationary pressure. China’s PPI also declined 2.5%, worsening from February’s 2.2% fall.
Conclusion: Will Gold Price Break $3,300 Soon?
With global trade tensions at a boiling point and inflation data missing forecasts, gold remains the top safe-haven pick.
Technical indicators support continued bullish momentum, with $3,250 and $3,300 as key levels to watch. Meanwhile, market participants are eyeing the Fed’s next move, which may further fuel demand for gold.
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