-
Gold prices surged at the start of the week, gaining 1% on Monday.
-
Trump's commitment to implementing tariffs across all countries fueled a sharp rise in gold prices.
-
Trading above $3,120, gold has already surpassed several analysts' projections.
Gold prices (XAU/USD) trade near $3,120 on Monday, closely watching their recent all-time high of $3,128. The surge follows a last-minute flight to safety as U.S. President Donald Trump confirmed that Tuesday’s reciprocal tariffs will apply globally, dashing hopes for any last-minute easing before Wednesday’s deadline.
Analysts from major banks, including Goldman Sachs, have raised their forecasts, with Goldman now predicting gold to hit $3,300 by year-end, citing strong central bank demand and inflows into bullion-backed ETFs. Meanwhile, U.S. bond yields have dropped, flirting with a break below March’s low of 4.172%.
Market Movers: Further Upside in Focus
- Gold options are becoming cheaper, suggesting traders expect prices to remain high rather than experiencing a short-lived spike, unlike past commodity shocks. Bloomberg reports that gold's steady rise has normalized the current levels.
- The CME FedWatch tool shows increased expectations for a Federal Reserve rate cut, with the likelihood of a cut in May rising to 18.6% from 11% last week. A June cut is now seen as almost certain, with only a 16.5% probability that rates will stay unchanged.
- Amid these developments, markets exhibit a clear pattern: gold is rising, bond prices are climbing, the U.S. dollar is softening, and equities are selling off.
Technical Analysis: Gold’s Rally Faces Key Levels
Gold has already broken through the daily R1 resistance at $3,096 and R2 at $3,108 in Monday’s rally. The next upside targets are the psychological levels of $3,130 and $3,150. However, traders should expect some profit-taking along the way rather than a continuous upward move.
On the downside, previous resistance levels at $3,096 and $3,108 are now acting as support, with the daily pivot point at $3,075 providing additional stability. If gold pulls back further, S1 support at $3,063 could come into play, especially if any headlines trigger a reversal of the recent gains.
XAU/USD: Daily Chart
