- Gold (XAU/USD) surges over 1% as rising global tensions, falling stocks, and a weaker US Dollar boost demand.
- Trump’s 25% auto tariffs fuel trade war fears, propelling Gold to fresh record highs.
- Risk sentiment deteriorates as Wall Street slides and the US Dollar Index (DXY) retreats.
- Traders eye US Core PCE inflation data amid solid job figures and 64.5 bps of Fed rate cuts expected in 2025.
Gold prices extended their uptrend on Thursday, reaching a new all-time high of $3,059 as uncertainty over US trade policies fueled demand for the safe-haven metal. XAU/USD is currently trading at $3,051, up more than 1%, as traders respond to escalating tensions sparked by President Donald Trump's newly imposed 25% tariffs on automobiles.
Trump’s tariff announcement has intensified fears of a prolonged trade war, prompting bullion investors to push gold prices beyond the key $3,050 level. As a result, risk sentiment deteriorated, leading to a sell-off on Wall Street and a sharp decline in the US Dollar Index (DXY), which dropped 0.33% to 104.31.
Global leaders reacted swiftly to Trump’s decision, with Canada and the European Union (EU) warning of potential retaliatory measures. Meanwhile, the US economy continues to show resilience, with labor market data indicating strength. Initial jobless claims for the week ending March 22 came in at 224K, slightly below the forecast of 225K, while Q4 2024 GDP growth was revised up to 2.3% quarter-over-quarter, though just shy of the 2.4% projection. Housing market data showed some improvement, with pending home sales declining 3.6% YoY in February, a less severe drop than January’s 5.2% decrease.
Market participants now turn their focus to Friday’s release of the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. Money markets have priced in 64.5 basis points of Fed rate cuts in 2025, adding to speculation about the central bank’s future monetary policy direction.
Daily Market Movers: Gold Holds Firm Above $3,000 Amid Trade Tensions
- The US 10-year Treasury yield remains flat at 4.371%, while real yields on 10-year Treasury Inflation-Protected Securities (TIPS) edged down to 1.979%.
- The final Q4 2024 GDP estimate was revised higher to 2.3%, though slightly below the 2.4% forecast.
- US jobless claims remained steady, underscoring labor market strength.
- Pending home sales improved from a 5.2% YoY decline in January to a 3.6% drop in February, signaling a gradual housing market recovery.
XAU/USD Technical Outlook: Gold Eyes $3,100 Target
Gold hit a record high of $3,059 on Thursday as Trump’s trade policy provided a fresh catalyst ahead of the PCE inflation report. With strong bullish momentum, a test of the $3,100 level appears likely in the near term.
The Relative Strength Index (RSI) has entered overbought territory, suggesting that buyers are in control. However, traders should remain cautious, as extreme RSI readings above 80 could signal a potential pullback.
Key resistance levels for XAU/USD are at $3,059, with a break above this level paving the way for a move toward $3,100. On the downside, initial support lies at $3,050, followed by $3,000 and the February 24 swing high at $2,956. A further decline could see gold testing $2,900 and the 50-day Simple Moving Average (SMA) at $2,887.
