Gold price enters critical zone, with potential to reach a new all-time high

Gold price (XAU/USD) is delivering a powerful performance in Thursday’s early trading, hovering around $3,107 at the time of writing. Since Tuesday morning, the precious metal has surged nearly 5%, driven by geopolitical tensions and major shifts in global trade policy.

The catalyst behind the rally was U.S. President Donald Trump’s announcement of a 90-day suspension on higher tariffs for 56 countries and the European Union, reverting to the baseline 10% rate. However, in a surprising twist, Trump imposed immediate 125% tariffs on Chinese imports after Beijing revealed plans to retaliate with an 84% levy on all U.S. goods starting Thursday.

These aggressive moves have reignited fears of a prolonged trade war between the world’s two largest economies. Meanwhile, the People’s Bank of China (PBOC) weakened the Yuan for the sixth consecutive session, ignoring warnings from U.S. Treasury Secretary Scott Bessent. This suggests China may again use its currency as leverage in trade negotiations, as seen during the previous trade conflict.

Market Movers: Volatility Drives Flight to Safety

• The uncertainty stemming from the U.S. administration's shifting trade policies has rattled global markets, pushing investors toward safe-haven assets like gold. So far in 2025, gold is up 18%, supported not only by geopolitical tension but also by expectations of further monetary easing by the Federal Reserve and consistent buying by central banks, according to Bloomberg.
• However, the CME FedWatch Tool shows reduced expectations for a rate cut in May, with only a 19.5% chance compared to 44.6% earlier this week. June, however, still shows a 75.3% likelihood of lower borrowing costs.
• Adding to the bullish sentiment for gold, Chinese leaders are reportedly meeting to discuss new stimulus measures, further fueling investor demand for bullion amid weakening performance in other financial assets. According to Reuters, long-term investors and even central banks continue to treat gold as a core holding for portfolio stability across economic cycles.

Gold Technical Outlook: Bullish Momentum Builds

Gold has recovered strongly from its recent two-day dip, largely fueled by Trump’s tariff comments and the 90-day delay in implementation. Still, this pause does not guarantee trade deals will be reached, and uncertainty may persist as the deadline approaches.

Technically, gold is currently testing the R1 resistance level at $3,131, with the all-time high of $3,167 within reach. A break above that could see a further push toward the R2 resistance at $3,180.

On the downside, the daily Pivot Point stands at $3,050, with key support seen around the March 10 high at $3,057. If this area fails to hold, the bears may target S1 support at $3,002, bolstered by the March 14 high at $3,004 and the psychologically significant $3,000 level—all forming a solid support zone.

Gold remains well-supported amid global economic tension, unpredictable trade policy shifts, and weakening confidence in traditional financial assets. With bullish technical signals and strong fundamental drivers, a new all-time high for gold could be on the horizon.