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Gold prices remain supported by safe-haven demand on Monday amid ongoing trade uncertainties.
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The US Dollar plunged to a two-year low on rising recession fears, further boosting the XAU/USD pair.
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However, overbought signals on the daily chart suggest caution before initiating new bullish positions.
Gold price (XAU/USD) continues its strong intraday ascent heading into the European session on Monday, trading close to record highs and eyeing the key $3,400 level. Persistent trade-related concerns continue to sour investor sentiment, triggering risk aversion across global markets and boosting demand for the safe-haven metal.
The escalating uncertainty stems largely from US President Donald Trump’s shifting tariff policies, which have shaken market confidence in the US economic outlook. Combined with growing expectations that the Federal Reserve (Fed) could restart its rate-cutting cycle soon, the US Dollar (USD) has slid to its weakest level since April 2022—further supporting Gold’s upward trajectory. Notably, XAU/USD bulls appear undeterred by the metal’s technically overbought status.
Daily Digest Market Movers: Gold price rises as traders flee to safety and USD weakens
- Growing fears over the economic damage from President Trump’s trade tariffs and the intensifying US-China trade conflict have fueled strong safe-haven flows into Gold, pushing the price to a fresh all-time high on Monday. The US recently imposed tariffs of up to 145% on select Chinese goods, with reports of some duties hitting 245%. In response, China slapped 125% tariffs on US exports.
- Trump’s aggressive trade stance has raised alarms about potential disruptions to global trade and the threat of a recession in the US. This has led to further pressure on the US Dollar, which has weakened despite hawkish remarks from Fed Chair Jerome Powell. Powell emphasized that the Fed is in no rush to change policy until there's more economic clarity, but markets remain unconvinced.
- Meanwhile, investors are still pricing in a full percentage point of rate cuts from the Fed by year-end, with the next possible move expected in June. This dovish outlook, combined with thin liquidity conditions due to the Easter Monday holiday, continues to favor the non-yielding yellow metal—despite overbought readings on technical charts.
- On the geopolitical front, Saturday saw both Iran and the US agree to begin expert-level talks around a potential nuclear deal. In addition, Russian President Vladimir Putin declared a one-day ceasefire in Ukraine, sparking cautious optimism around easing tensions. However, these developments have yet to significantly lift risk sentiment or dent demand for traditional safe-haven assets like Gold.
- Looking ahead, there are no major economic releases from the US scheduled for Monday. However, remarks from Chicago Fed President Austan Goolsbee may offer fresh clues on the Fed’s monetary stance. Traders will also keep an eye on trade headlines and shift focus to Wednesday’s flash PMIs, which may provide a clearer snapshot of global economic health.
Gold bulls eye higher ground, but overbought signals urge caution
From a technical standpoint, the sustained buying trend reinforces a bullish near-term outlook for XAU/USD. However, with the daily Relative Strength Index (RSI) holding well above 70, the metal appears overbought and may be due for a brief consolidation or pullback before resuming its uptrend.
Any downside correction is likely to find initial support near the $3,350 zone, followed by the day’s earlier low around $3,329–3,328. A break below this area could lead to a deeper pullback toward the $3,300 mark and possibly as low as Friday’s swing bottom near $3,284. The latter stands as a critical support level—decisive weakness below it may signal a shift in momentum and expose the metal to further losses.
Nonetheless, with trade jitters persisting and the USD under pressure, the broader bias for Gold remains tilted to the upside.
