- Overnight remarks from President Trump regarding upcoming tariffs have driven Gold prices higher.
- The focus on tariffs has now shifted to China and Europe, fueling a third consecutive day of Gold gains.
- Gold reaches a new two-month high, approaching the all-time peak of $2,790.
Gold (XAU/USD) continues its rally with over 1.20% gains on Tuesday, setting the stage for potential additional gains on Wednesday. The bullish momentum is driven by comments from US President Donald Trump, particularly the announcement of a 10% tariff on Chinese goods, which has further boosted demand for Bullion.
At the same time, investors are closely monitoring the impact of the Trump administration’s tariff and tax cut policies, which could strain national finances and trigger an inflation surge. This scenario might limit the Federal Reserve’s ability to continue easing monetary policy. Since higher borrowing costs often create a headwind for Gold due to its inverse correlation with interest rates, this dynamic adds another layer of complexity to the precious metal’s trajectory.
Daily Market Movers: Silent Fed
- Zimbabwe’s gold exports climbed to $1.44 billion in 2024, up from $1.22 billion in 2023, according to data from the Reserve Bank of Zimbabwe, as reported by Bloomberg.
- Silver futures briefly surged following President Trump’s comments on tariffs targeting China, Mexico, and Canada. With Mexico being the largest silver producer, uncertainty remains about whether the tariffs will include silver imports, Reuters reports.
- US Treasuries remain under pressure, with the 10-year benchmark yield trading at 4.56%, close to its yearly low of 4.528% recorded on Tuesday.
Technical Analysis: Awaiting the Data
Gold is currently enjoying a strong rally, but this momentum may shift once US inflation data is released. If the data signals renewed inflationary pressures, profit-taking could quickly emerge, prompting traders to lock in gains. For now, the rally continues, but a potential reversal could push Gold prices back to $2,700. The downward-sloping trendline from last week’s broken pennant chart pattern at $2,668 will act as the first key support. If the decline deepens, the next support level is around $2,649, where the 55-day and 100-day Simple Moving Averages (SMAs) converge.
On the upside, Gold is targeting $2,790, still over 1% above current levels. A break above this point would pave the way for a fresh all-time high. While some analysts predict a rise to $3,000, $2,800 appears to be the next significant resistance level in the near term.
