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Gold price seeks support around $3,120 on Wednesday as traders await Trump's tariff announcement.
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Markets are weighing the potential impact of the official announcement on reciprocal tariffs.
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Gold traders may reverse the rally if the tariffs are less severe than expected.
Gold price (XAU/USD) stabilizes just above $3,120 on Wednesday, following a slight pullback from a fresh all-time high of $3,149, which was reached the previous day before closing lower. The Gold rally slowed ahead of the highly anticipated announcement by US President Donald Trump regarding the official implementation of reciprocal tariffs later this Wednesday at the White House. However, with growing uncertainty surrounding the event, the announcement could end up being less impactful than expected, potentially triggering a sharp correction in Gold prices as a "buy the rumor, sell the news" scenario.
In addition, traders are preparing for the important private sector employment data from Automatic Data Processing (ADP). While there is no proven correlation with Nonfarm Payrolls (NFP) data, ADP figures are still seen as a key indicator. Expectations are for 105,000 new jobs to be added in March, up from 77,000 in February, potentially reflecting efforts to push public sector employees into private jobs.
Daily Digest Market Movers: Markets Await Key Developments
- The White House has been tight-lipped about the specifics of the tariffs, which are set to be implemented immediately after Trump's 20:00 GMT address on Wednesday. This uncertainty has triggered heightened volatility, including a selloff in US stocks. Although uncertain times often favor Gold, investors are closely watching how the new tariffs will affect global trade, the economy, and geopolitical tensions, as reported by Bloomberg.
- According to the CME FedWatch Tool, the likelihood of a rate cut in May is at 15.8%, while a cut in June remains the most likely scenario, with only a 25.6% chance that rates will stay at their current level.
- Meanwhile, Huaan Yifu Gold ETF, China's largest gold investment vehicle, saw record inflows of 1.4 billion Yuan ($194 million) on Monday, followed by another 1 billion Yuan the next day. These significant inflows have led to Gold ETFs holding the largest assets under management among commodity-related investments in China, as reported by Reuters.
Gold Price Technical Analysis: Risk of Profit-Taking
As the key event of the day approaches, the "buy the rumor, sell the fact" strategy could be in play. The announcement of the reciprocal tariffs could trigger profit-taking in Gold, as separate trade agreements and partial unwinds may follow.
On the upside, the initial resistance is at $3,141 (daily R1), followed by the all-time high of $3,149. The next target could be $3,169 (R2), with a broader upside potential extending towards $3,200.
On the downside, support at $3,093 (S1) is still distant, but could be tested without erasing all of this week’s gains. Further support lies at $3,073 (S2), ensuring that Gold does not fall below the $3,000 mark.
XAU/USD: Daily Chart
