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Gold extends its winning streak, climbing over 4% in just two sessions.
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Heightened geopolitical tensions involving the Trump administration, instability in Asian currencies, and the Israel conflict are pushing investors toward safe-haven assets like Gold.
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Multiple upside catalysts remain in play, raising the likelihood of a retest of Gold’s all-time high near $3,500.
Gold (XAU/USD) climbs to $3,380, marking a fresh two-week high as escalating global geopolitical tensions continue to fuel demand for safe-haven assets. In the Middle East, Israel intensifies preparations for a full-scale ground offensive in Gaza, heightening regional instability. In the U.S., pressure mounts on President Donald Trump’s administration to finalize its long-promised first trade deal, with Commerce Secretary Howard Lutnick indicating it will be with a top ten economy, according to Fox News.
Meanwhile, currency market volatility is adding to investor unease, particularly after the Taiwan Dollar (TWD) surged sharply against the U.S. Dollar (USD) on Monday. This unexpected move raises concerns of a broader weakening in the USD against other Asian currencies, potentially undermining its safe-haven appeal and further supporting Gold prices.
Adding to the uncertainty, political turmoil is unfolding in Germany, where the Bundestag failed to confirm Chancellor Friedrich Merz in a historic vote, signaling a loss of coalition confidence. The unprecedented outcome raises the possibility of snap elections or an unclear political path forward, further boosting Gold’s attractiveness as a hedge in times of instability.
Daily Digest Market Movers: Carney Heads to Washington
- Newly appointed Canadian Prime Minister Mark Carney is scheduled to meet U.S. President Donald Trump at the White House on Tuesday to address the Trump administration’s latest tariff measures on Canadian exports.
- Market sentiment is showing modest improvement following Monday’s sharp Taiwan Dollar (TWD) surge, though concerns around Asian currencies remain elevated. Charu Chanana, Chief Investment Strategist at Saxo in Singapore, told Reuters that “the real action today is in Asian FX,” warning that if these currencies continue appreciating rapidly, it could trigger fears of a “reverse Asian currency crisis.” This scenario could have spillover effects on bond markets, as Asian institutions may reconsider their unhedged exposure to U.S. Treasuries—a trend that tends to benefit Gold as yields fall.
- Meanwhile, the Shanghai Gold Exchange is planning to extend its warehouse infrastructure to Hong Kong, aiming to boost the appeal and reach of its yuan-denominated precious metal products beyond mainland China, Bloomberg reports.
- According to the CME FedWatch tool, markets assign only a 2.4% chance of a Federal Reserve rate cut at May’s meeting, with a 97.6% likelihood of no change. The odds for a rate cut in June stand at 29.8%.
Gold Price Technical Analysis: “Show Me the Deals!”
Gold prices continue to rally amid a second wave of safe-haven inflows, as shifting dynamics in financial markets erode the U.S. Dollar’s status as the preferred hedge—leaving Bullion to take its place. A failure by President Trump’s administration to secure a major trade deal soon, particularly with a G20 country, could further accelerate this trend and send Gold soaring.
On the upside, the R1 resistance at $3,368 has already been breached in early Tuesday trading. If momentum holds, Gold could quickly test R2 at $3,403. Although the all-time high of $3,500 may be out of reach for today, it's clearly within the market’s crosshairs.
On the downside, initial support lies at the Pivot Point of $3,303. Below that, S1 at $3,268 aligns with several recent lows from late April, while $3,245 provides an additional key level to watch in case of a sharp pullback.
