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Gold price drops to $3,116 in a volatile trading session for the precious metal.
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Market sentiment is unstable after US President Trump's announcement of the harshest tariffs in over a century.
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Gold traders are capitalizing on the ‘sell the fact’ approach, taking profits.
Gold price (XAU/USD) experiences a pullback after briefly reaching a fresh all-time high of $3,167 in the early Asian session. Traders are taking profits, pushing the precious metal's price down to $3,130 as of Thursday. Markets are still absorbing the shock of US President Donald Trump's announcement of his reciprocal tariff plan, which is having a ripple effect across global markets.
Trump's plan includes a global base tariff of 10%, with additional levies on certain countries, such as China, where a 54% tariff is now in effect. As a result, safe-haven demand for assets like gold has surged, with equities dropping globally, bond yields declining, and the US Dollar (USD) weakening against major currencies.
Daily Digest Market Movers:
- After Trump’s tariff announcement, Asian gold producers benefit from the precious metal's record high, as fears of a global economic slowdown prompt increased demand for safe-haven assets.
- The CME FedWatch tool indicates a 21.5% chance of a rate cut in May, with a 27.5% probability of rates remaining unchanged in June. The overall yield curve suggests that the Federal Reserve may extend its pause.
- According to reports, steel, aluminum, gold, and copper imports won’t face reciprocal tariffs, providing some relief to domestic buyers already dealing with 25% tariffs on key metals under the Trade Act of 1962.
Gold Price Technical Analysis: Buy the rumor, sell the fact
The "buy the rumor, sell the fact" dynamic is unfolding in gold price action this Thursday as markets digest Trump’s tariff implementation. While negotiations with other countries may ease tensions and improve sentiment, potentially softening gold prices, retaliatory tariffs from other nations could drive gold higher, potentially reaching new all-time highs.
On the upside, the first key resistance level is at $3,149 (daily R1), followed by the fresh high at $3,167, which aligns with the R2 resistance at $3,165. A break above this level opens the path for a broader upside target of $3,200.
On the downside, immediate support is seen at $3,111 (S1), though a drop below this level would not necessarily erase the week's gains. If this level is breached, the next support at $3,089 (S2) could help prevent a drop below $3,000.
XAU/USD: Daily Chart
