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Escalating US-China tensions drive increased demand for Gold.
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Gold rallies as investors shift away from the weakening US Dollar.
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Prices climb 2% on the day, testing key trendline resistance.
Gold prices are trading firmly higher on Monday, buoyed by rising market uncertainty and increased demand for safe-haven assets. The shift in sentiment follows a fresh wave of geopolitical and economic tension, with investors turning away from riskier assets and the weakening US Dollar further supporting the precious metal.
The latest spark comes from US President Donald Trump's announcement of plans to double tariffs on steel and aluminum imports—from 25% to 50%—a move that reignites trade concerns and puts pressure on global markets. These aggressive tariff measures have shaken confidence in risk assets, enhancing the appeal of Gold as a protective hedge.
Gold Daily Digest: Trump’s Tariff Threats and Renewed US-China Trade Tensions Back in Spotlight
- US-China relations have also taken a turn for the worse. Trump accused Beijing of violating a key trade agreement reached in Geneva, claiming on his Truth Social post: "China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!" The Geneva pact had established a 90-day truce in tariff escalations, with both sides agreeing to significantly lower import duties and China promising to lift export restrictions on critical minerals vital to US industry.
- China responded sharply, calling the accusations "groundless" and pointing to a series of US-imposed restrictions, including export controls on AI chip technology, bans on chip design software sales, and visa revocations for Chinese students. Beijing reiterated its stance on defending national interests and warned of "resolute and forceful measures" if Washington continues its aggressive posture.
- With the US Dollar under pressure from these geopolitical developments and broader concerns over fiscal stability, Gold is benefiting from a renewed wave of safe-haven inflows, which may continue to drive prices higher in the near term.
Gold Technical Analysis: XAU/USD Challenges Key Resistance
Gold (XAU/USD) is currently testing the upper boundary of a symmetrical triangle pattern, facing resistance near the critical psychological level of $3,350.
The 20-day Simple Moving Average (SMA) is hovering around $3,295, just beneath the $3,300 level, offering near-term support.
Prices have gained 2% so far in today’s session, shifting the tone to bullish. The Relative Strength Index (RSI) has risen to 57, reflecting strengthening momentum.
A clear breakout above the trendline resistance could trigger a move toward the May high near $3,431, and possibly a retest of the April 22 all-time high at $3,500.
Conversely, if bulls fail to sustain momentum, a drop below $3,300 could lead to a pullback toward the 23.6% Fibonacci retracement of the January–April rally at $3,291, and further down to the 38.6% Fibonacci level near $3,161.
Key Levels to Watch:
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Resistance: $3,350, $3,431, $3,500
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Support: $3,300, $3,291 (23.6% Fib), $3,161 (38.6% Fib)
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Trend Bias: Bullish above $3,300, breakout confirmation needed for further gains
Gold daily chart
