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Gold Soars as Geopolitics and Fed Uncertainty Fuel Safe-Haven Demand

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  • May 5, 2025
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Gold prices rallied more than 1% on Monday, fueled by safe-haven demand as geopolitical tensions rise and with investors expecting the Federal Reserve’s next interest rate decision. Geopolitical tensions, such as a Houthi missile strike close to Ben Gurion airport and rising hostilities in Gaza, and U.S. President Trump’s attack on the Fed, have led investors to take refuge in gold. Although the CME FedWatch tool shows a low likelihood of a rate cut this week, markets are anticipating a potentially more dovish attitude in the subsequent months. According to technical analysis, gold could continue moving upward, and the important resistance points are at $3,290 and $3,320, and the support points at $3,244 and $3,219. KEY LOOKOUTS • Ongoing tensions in the Middle East, such as the Houthi missile attack on Ben Gurion airport and Israel’s subsequent military retaliation, continue to increase market uncertainty, fueling safe-haven demand for gold. • The Federal Reserve’s May 7 meeting is a key event for market sentiment. Although no rate cuts are anticipated, any indication of dovishness or slowing of rate hikes could continue to support gold prices. • President Trump’s continuing criticism of the Federal Reserve and Chairman Jerome Powell, along with the possibility of political pressure, may lead to the Fed’s policy direction in the future, affecting gold as a safe-haven asset. • Gold has breached significant resistance levels, with the next targets being $3,290 and $3,320. Nevertheless, robust support is established at $3,244 and $3,219, which may decide whether the uptrend momentum will be sustained. As geopolitical tensions increase, especially with the Houthi attack close to Ben Gurion airport and Israeli military build-up, investors are rushing towards gold as a safe-haven asset. With the Federal Reserve’s rate decision approaching on May 7, the market is anxiously awaiting any hints of dovishness, particularly as President Trump continues to put pressure on the Fed to reduce rates. Although short-term rate cuts are not expected, the potential for a dovish stance in the next few months could continue to fuel gold price gains. Technically, gold has penetrated key resistance levels and the next possible targets are $3,290 and $3,320, and support continues to be firm at $3,244 and $3,219, positioning for potential further upward movement. Gold prices have shot up as a result of escalating geopolitical tensions and expectations for the Federal Reserve rate decision on May 7. As tensions in the Middle East continue to increase and Trump keeps criticizing the Fed, gold is a robust safe-haven asset, bolstered by technical support levels above $3,244. • Increasing tensions, such as the Houthi strike on Ben Gurion airport and Israel’s subsequent military response, are increasing market uncertainty and supporting demand for gold as a safe-haven asset. • U.S. President Donald Trump’s ongoing frustration with the Federal Reserve and demands for rate cuts may affect market sentiment and Fed policy actions. • The Federal Reserve will make its rate decision on May 7, with markets looking for no rate cuts but keenly awaiting any signs of dovishness in reaction to recent economic news. • Gold has surged by over 1% as investors rush to it due to geopolitical uncertainty and a risk-averse economic outlook. • Gold has broken key resistance levels at $3,265, with possible upside targets at $3,290 and $3,320. • Firm technical support for gold is at $3,244 and $3,219, which may act as a floor for prices if there is any pullback. • Even with recent softening in U.S. economic data, gold continues to be an attractive hedge, especially if the economy is threatened by stagnation or recession risks from extended high rates. Gold prices have risen as investors look for safety in the face of increasing geopolitical tensions, such as the Houthi attack on Ben Gurion airport and rising tensions in the Middle East. These events, combined with uncertainty over the Federal Reserve’s next action on interest rates, have prompted traders to consider gold a safe investment. President Trump’s consistent vitriol against the Fed, coupled with his rate cut calls, has introduced more volatility to market sentiment, and gold has become a greater option for investors who want to safeguard their investments against possible economic turmoil. XAU/USD DAILY CHART PRICE CHART SOURCE: TradingView With the rate decision by the Federal Reserve just around the corner on May 7, the markets are anxiously watching for any indication from the Fed of impending rate cuts or a dovish policy. While no short-term rate cuts are anticipated, the general economic environment, with softening in some areas, has fueled speculation that the Fed might refrain from tightening monetary policy further. This ambiguity, coupled with the persistent geopolitical tensions, still underpins gold’s safe-haven status, with investors taking bets on its capacity to withstand possible economic setbacks or extended episodes of market turbulence. TECHNICAL ANALYSIS Gold has just cleared major resistance points, pointing towards a possible continuation of the positive trend. The price crossed the $3,265 level, hinting at further potential on the upside with near-term levels of resistance at $3,290 and $3,320. On the negative side, support is firm at $3,244, with further support at $3,219. These technical levels are important in defining gold’s near-term price direction, as a break below these support levels could indicate a change in sentiment, while further strength above them can confirm the bullish view. The latest price action is being watched carefully to determine if the upward trend will be maintained in the days before the Fed’s rate announcement. FORECAST Gold will continue to gain, fueled by both geopolitical uncertainty and market volatility over the Federal Reserve’s policies. With global risks still on the rise, investors will continue to turn to gold as a safe-haven asset. If gold holds firm above the $3,265 resistance level, it may test the next crucial levels at $3,290 and $3,320. A sustained dovish stance by the Federal Reserve, especially if they indicate no near-term rate cuts or additional monetary tightening, would also continue to support the uptrend. As long as geopolitical tensions continue

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Commodities Gold

Gold Struggles Below $3,300 Amid US-China Trade Optimism and USD Recovery

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  • April 28, 2025
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Gold is having trouble gaining traction below the $3,300 level as optimism towards the prospects of a US-China trade deal and a small recovery in the US Dollar bear down on the metal. Deterioration in China’s gold consumption, especially in jewelry, also weighs on the precious metal. In spite of this, geopolitical tensions, such as the Russia-Ukraine war, and June Federal Reserve rate-cut expectations lend some support to gold as a safe-haven asset. Investors continue to hold back, looking to major US economic data due out this week that may bring more clarity on Fed policy expectations. Technical analysis indicates that gold prices may continue their recent fall if they are unable to hold above key support levels, but a bounce above $3,300 may set the stage for a move towards higher resistance levels. KEY LOOKOUTS •  Ongoing optimism regarding a possible US-China trade deal may put pressure on gold prices, but any setbacks or reversals in trade negotiations may prompt a renewed demand for safe-haven assets such as gold. •  Markets are on the lookout closely for signals that the Federal Reserve will make more rate cuts in the future. Any signals for more aggressive loosening will limit the US Dollar’s rebound and offer support for gold prices. •  Russia-Ukraine fighting and North Korean participation in the war continue as the primary geopolitical risks that could support demand for gold as an insurance asset if tensions increase. •  Future important economic reports such as the JOLTS job openings, Personal Consumption Expenditures (PCE), and non-farm payrolls (NFP) could have an impact on market sentiment and the policy stance of the Fed, which may give new direction to gold prices. Various important factors affecting gold prices in the short term need to be watched closely by investors. The latest news in US-China trade talks continues to be paramount, with any indication of improvement potentially diminishing safe-haven demand, whereas disappointments may provoke new buying. The Federal Reserve policy direction is also being watched, with markets assuming the possibility of rate cuts that would devalue the US Dollar and boost gold. Geopolitical tensions, especially the Russia-Ukraine conflict and North Korea’s involvement, continue to support the metal’s safe-haven demand. Lastly, this week’s US economic releases, such as JOLTS, PCE, and the NFP report, are likely to give more indications on the Fed’s direction, which may create volatility in gold prices. Gold prices are still sensitive to US-China trade updates, expectations of a Fed rate cut, and geopolitical tensions. Future US economic releases, such as PCE and non-farm payrolls, may offer new direction. Investors are observing key support at $3,260 and resistance at $3,331. •  Expectations for the easing of trade tensions between the US and China are putting pressure on gold prices, with advances in the negotiations having the potential to lower safe-haven asset demand. •  A small increase in the US Dollar has been helping gold struggle below the $3,300 level, although additional rate cuts by the Federal Reserve have the potential to curb dollar gains. •  A year-over-year decrease of 5.96% in Chinese gold consumption, particularly in jewelry, places pressure on gold prices even as there is increased demand for gold bars and coins. • Geopolitical tensions, such as the Russia-Ukraine conflict and North Korea’s activities, continue to benefit gold as a safe-haven asset. • Bets in the market for additional Federal Reserve rate reductions, possibly starting in June, may depress the USD and support gold prices as a non-yielding asset. • Major US reports such as the JOLTS job openings, PCE, and non-farm payrolls (NFP) will be instrumental in determining the Fed’s future policy actions and may drive gold price action. •  Gold is now probing important support at $3,260, with overhead resistance at $3,331. A decline below support would put further losses in train, while a bounce above resistance could pave the way for a reversal to the upside. Gold prices are under pressure from several sources, including expectation for a possible US-China trade agreement and a small US Dollar recovery. With trade tensions between the world’s two biggest economies easing, investors are less willing to turn to gold as a safe-haven asset. And China’s decreasing demand for gold, particularly for jewelry, has also helped the prices of gold decline, since the country is among the largest consumers of gold. This falling consumption is part of more general economic headwinds, including the high price of gold that is slowing down demand for more conventional types of gold investment. XAU/USD Daily Price Chart Source: TradingView Gold is being buoyed despite these headwinds by geopolitical uncertainty, including the Russia-Ukraine conflict that continues to fuel demand for assets that are perceived as being safer in times of uncertainty. In addition, anticipation of additional interest rate reductions by the Federal Reserve may keep the US Dollar from appreciating much, providing some degree of support for gold. With markets waiting for major US economic releases, such as the JOLTS report and non-farm payrolls, there is a degree of caution, with investors seeking greater clarity on the monetary policy of the Fed and how it may affect both the Dollar and gold. TECHNICAL ANALYSIS Gold prices are now testing crucial support levels near $3,260, and a possible breakdown below here could indicate more downside risk. If the price is unable to hold this support, it could trigger a move towards the $3,225 area or even the psychological $3,200 level. On the positive side, gold encounters resistance around the $3,331-$3,332 levels, and a firm break above this level can possibly pave the way for a bounce back to the $3,366-$3,368 supply zone. A strong push above this zone can potentially pave the way for a larger rally, with the $3,400 level and higher serving as key targets for bulls. The major price action over the next few days will be largely influenced by the interaction of general economic data and geopolitical events. FORECAST Gold may see a bounce if geopolitical tensions, including the Russia-Ukraine conflict, keep

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Commodities Gold

Gold Price Pulls Back from Record Levels as US Trade Negotiations Ease Market Nerves

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  • April 17, 2025
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Gold prices pulled back from a new all-time high of $3,358, pulling back below the $3,300 level, as hopes for the United States’ success in trade negotiations with Japan and Mexico eased global market nerves somewhat. Nevertheless, the downside for gold is still limited, as persistent US-China trade tensions continue to underpin safe-haven demand. The US Dollar also gained modest strength after hawkish comments from Federal Reserve Chairman Jerome Powell and indications of diplomatic progress in trade talks. Although investors took some profits, the overall gold outlook remains bullish, supported by ongoing geopolitical concerns and robust technical momentum. KEY LOOKOUTS •  Although the recent correction from its all-time high of $3,358, gold’s overall trend is still bullish, underpinned by solid technical indicators such as the 14-day RSI remaining above 70 and EMAs pointing upwards. • The current dignity-driven confrontation between the US and China continues to offer a support level for gold prices, sustaining safe-haven demand in the face of global economic uncertainty. • The US Dollar Index recovered from close to a three-year low after trade talks with Japan and Mexico indicated advances, alleviating short-term concerns over global dislocation and weighing on gold. • Gold has firm resistance at the $3,400 level, while the 20-day EMA near $3,135.50 will serve as crucial support in case the correction further intensifies. Gold prices pulled back from a record high of $3,358 as progress in U.S. trade talks with Japan and Mexico slightly calmed global market jitters, prompting some investors to book profits. However, the ongoing U.S.-China trade tensions continue to support the precious metal’s appeal as a safe-haven asset, limiting further downside. Meanwhile, the U.S. Dollar made a small comeback, assisted by hawkish comments from Federal Reserve Chairman Jerome Powell and declining trade uncertainty, which also dented gold’s near-term momentum. Even with the correction, the overall outlook for gold remains positive, underpinned by robust technicals and ongoing global economic risks. Gold prices eased from a new all-time high of $3,358 as the advance in U.S. trade talks with Japan and Mexico calmed global economic uncertainty. Yet, current U.S.-China tensions are still boosting safe-haven demand, keeping the overall bullish stance for gold in place. • Gold prices corrected from a new all-time high of $3,358, falling back below $3,300 on profit-booking. •  Unsolved US-China trade tensions continue to provide underlying support for gold as a safe-haven asset. •  The U.S. Dollar recovered modestly from a near three-year low, limiting gold’s upside in the near term. •  Federal Reserve Chairman Jerome Powell’s hawkish comments indicated optimism about U.S. economic stability, which strengthened the dollar. •  Technical indicators are still bullish, with the 14-day RSI still above 70 and all key EMAs pointing upwards. •  $3,135.50 as solid support (20-day EMA) and $3,400 as key resistance. Gold prices softened as hopes increased about the advancement of U.S. trade negotiations with Japan and Mexico. Encouraging news from U.S. President Trump on the continuation of talks eased global market uncertainty, leading some investors to divert attention away from safe-haven commodities such as gold. The alleviation of trade tensions has for the moment dulled fears about possible disruptions in the global economy. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView But even with this advance, the unresolved China-U.S. trade row remains a lurking presence in the background, keeping market sentiment in check. The prospect of a standoff more about political ego than commerce, however, poses a guarantee that gold continues to be a critical buffer in times of uncertainty for investors. The market continues to be waiting for further developments as global economic risks are yet to run their course. TECHNICAL ANALYSIS Gold is still in the robust bullish trajectory despite recent correcting from an all-time high at $3,358. Prices are still trending well above principal moving averages, with all the short-to-medium-term Exponential Moving Averages (EMAs) rising – indicating prolonged demand. The 14-day Relative Strength Index (RSI) is still cruising above the level of 70, which implies that bull pressure is still firmly in place though some profit-booking at these high levels comes naturally. If the price continues its decline, the 20-day EMA at $3,135.50 is likely to serve as a strong support level, and on the upside, the $3,400 level is an important resistance barrier for any potential break. FORECAST Gold’s medium-term perspective is bullish, driven by ongoing global economic uncertainty and safe-haven demand, particularly as U.S.-China trade tensions persist. If positive momentum is regained, prices may retest the $3,300 level and target the psychological resistance of $3,400. Ongoing uncertainty regarding global trade relations, geopolitical tensions, and central bank policies can continue to drive further rallies in gold prices. On the negative side, any serious breakthrough in U.S. trade negotiations — particularly if the U.S. and China resume talks — would soothe global market jitters, taking some heat off gold. As long as profit-taking continues and the U.S. Dollar gains strength, prices of gold may drift toward the 20-day EMA level of $3,135.50, the next support point of note. A break through this would invite further corrections towards the $3,100 level.

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Commodities Gold

Gold’s Historic Leap Above $3,000: Market Responses, Geopolitical Uncertainty, and Prospects Ahead

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  • March 15, 2025
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Gold prices leapt above the historic $3,000 level to an all-time high of $3,004 per ounce before retreating to $2,982 due to US Dollar fluctuations and uncertainty regarding President Donald Trump’s trade agenda. The price rally was propelled by geopolitical uncertainties, such as the weakening Russia-Ukraine ceasefire and China’s ongoing gold buildup, which drove demand for the safe-haven metal. At the same time, fears of US recession intensified in the wake of soft consumer sentiment readings, fueling speculation about further easing of Federal Reserve policy in 2025. Despite the retreat, technical analysts foresee another attempt to drive prices higher to test resistance levels with support at $2,950 and resistance at $3,050 and $3,100 being key. KEY LOOKOUTS • Having briefly breached $3,000, gold bounces off $3,050 while support at $2,950 is still the key to knowing what will happen next. • Russia-Ukraine ceasefire uncertainty and China’s continuing gold purchases would potentially affect bullion demand and price movements. • Subdued consumer confidence and increasing recession worries boost hopes for Federal Reserve rate reductions, affecting the long-term outlook of gold. • Trump’s tariffs on steel and aluminum can stoke inflation fears, impacting the US Dollar and pushing gold prices up as a safe-haven. Gold’s recent rally above $3,000 underscores the increasing influence of geopolitical tensions, economic uncertainty, and changing monetary policies on the demand for the precious metal. The Russia-Ukraine ceasefire is still tenuous, while China’s ongoing gold hoarding underpins bullish sentiment. At the same time, US recession concerns have grown amid weak consumer sentiment numbers, increasing expectations of possible Federal Reserve rate reductions in 2025. Also, President Trump’s steel and aluminum tariffs have fueled inflationary fears, diminishing the US Dollar and further supporting gold as a safe-haven asset. While traders closely follow future economic data and Fed moves, gold’s capacity to hold onto its all-time highs will hinge on changing market dynamics. Gold’s historical rally above $3,000 is a response to increasing geopolitical risks, economic uncertainty, and inflation threats. Negative US consumer sentiment and expectations of Fed rate cuts drive bullish pressures, while Trump’s tariffs impose stress on the US Dollar, enhancing gold’s safe-haven appeal. • Gold momentarily peaked at a new all-time high of $3,004 per ounce before receding to $2,982 due to market volatility. • Failing Russia-Ukraine truce and persistent China gold buildup stimulate safe-haven demand for bullion. • Dovish consumer sentiment information heightens prospects of economic slow-down, sparking Federal Reserve interest rate reduction anticipations for 2025. • New import tariffs on aluminum and steel set off inflation concern, drenching the US Dollar while perpetuating bull-run in gold. • Soft Greenback spurs gold prices upward, though Treasuries market yield shifts as well as expected inflation provide variability. • Gold is resisted at $3,050 and $3,100, with very strong support at $2,950, followed by $2,900 and $2,850. • Investors look forward to next week’s Federal Reserve policy meeting for additional hints at interest rates and economic forecasts. Gold’s recent record of breaching $3,000 an ounce underscores growing global demand for safe-haven assets in light of increasing geopolitical and economic uncertainty. The ongoing Russia-Ukraine conflict, despite ceasefire efforts, remains a major factor influencing investor sentiment. Meanwhile, China’s central bank continues to expand its gold reserves, signaling strong institutional demand. The combination of these geopolitical risks and global market instability has further reinforced gold’s position as a preferred store of value. Furthermore, trade tensions, specifically US President Donald Trump’s tariffs on steel and aluminum, have stoked inflation fears, rendering gold a sought-after hedge against economic uncertainty. XAU/USD Daily Price Chart Chart Source: TradingView Apart from geopolitics and trade policies, the US economy is also at the center of influencing gold’s demand. A sudden drop in consumer confidence, fueled by fears of economic slowdown, has increased speculation that the Federal Reserve could relax monetary policy in 2025. The potential for lower interest rates and a weakening US Dollar enhances gold’s attractiveness as an alternative asset. Investors are eagerly awaiting future economic releases, such as retail sales and housing market reports, for additional clues regarding the health of the US economy. While uncertainty lingers, gold continues to be the focal point of investor attention, mirroring general anxiety regarding inflation, economic stability, and worldwide financial trends. TECHNICAL ANALYSIS Gold’s technical picture indicates a phase of consolidation following a brief move above the $3,000 mark. The metal encountered resistance around $3,004 before retreating, signaling profit-taking and a temporary respite in bullish pressure. The important support is around $2,950, which if broken, can send prices lower to $2,900 and $2,850. On the other side, a consistent rally above $3,000 can put the fence open for another test of $3,050 and maybe $3,100. Traders are in wait-and-see mode regarding the Federal Reserve’s monetary policy decision, with expectations of interest rates influencing gold’s next move. FORECAST Gold’s upswing is in place as geopolitics, rising inflation expectations, and possible Federal Reserve rate reductions underpin prices higher. Gold can trigger yet another push upward to the next resistance levels at $3,050 and $3,100 if it stays above $3,000. Ongoing central bank purchases, especially from China, and weakening US Dollar may underpin additional support for the rally. Moreover, any increase in geopolitical tensions or dovishness from the Fed can fuel safe-haven demand, supporting gold’s long-term uptrend. Gold has good fundamentals but is exposed to downside risks if profit-taking becomes more aggressive or the US Dollar rallies unexpectedly. A fall below the critical support level of $2,950 can trigger a deeper correction towards $2,900 and $2,850. If economic reports, including retail sales or housing data, beat expectations, they may decrease the chances of aggressive Fed rate cuts, capping gold’s gains. Additionally, if inflation continues to be contained and risk appetite grows, investors will turn their attention to other assets or equities and temporarily put pressure on gold prices.

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Commodities Gold

Gold Market Remains Steady Despite Tariff Easing, Fed Rate Cut Speculations

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  • March 7, 2025
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Gold maintains its consolidation phase, retaining its weekly gains as market forces adjust due to easing tariff tensions and Federal Reserve rate cut speculations. The Trump administration’s move to exempt Mexican and Canadian imports from new tariffs derailed briefly the bullion rally, as traders now target the forthcoming Nonfarm Payrolls report. Fed official Christopher Waller foreshadowed possible rate reductions later this year, in accordance with market forecast. In addition, tensions continue between the U.S. and China, while Bitcoin’s weakness after a reserve announcement contributes to market uncertainty. With gold lingering around $2,917, important technical benchmarks reflect a cautionary but upbeat attitude, with traders weighing macroeconomic signals in anticipation of the next major development. KEY LOOKOUTS • Fed official Christopher Waller hinted at two or three rate cuts this year, with June being a potential turning point for monetary policy. • Traders closely watch Friday’s U.S. jobs data, as a strong report could delay rate cuts, impacting gold’s demand as a safe-haven asset. • The Trump administration’s exemption of Mexico and Canada from new tariffs influenced market sentiment, and future trade policy changes could impact gold prices. • Gold fluctuates around $2,917, while support lies at $2,928 and resistance at $2,900; breaking these points may initiate immense price action. Gold traders are on tenterhooks as prime macroeconomic and geopolitical events influence investor sentiment. The possibility of rate cuts by the Federal Reserve, indicated by Christopher Waller, continues to propel bullion, with June being a turning point. Investors keenly await the U.S. Nonfarm Payrolls report, which might impact Fed policy and affect the safe-haven demand for gold. The Trump administration’s announcement of exempting Mexico and Canada from new tariffs temporarily halted the rally in gold, but other trade policy changes may spark renewed volatility. Gold technically trades at $2,917, with resistance at $2,928 and solid support at $2,900, and these levels will be vital to short-term price action. Gold consolidates near $2,917 as traders eye key market drivers, including potential Fed rate cuts and the upcoming U.S. Nonfarm Payrolls report. The Trump administration’s tariff exemption for Mexico and Canada briefly stalled bullion’s rally. • Gold remains steady near $2,917, consolidating gains for the third consecutive day amid shifting market dynamics. • Fed member Christopher Waller hints at two or three rate reductions in 2024, and June as a critical decision time. • Friday’s U.S. jobs data are awaited by traders, which may impact Fed policy and the safe-haven demand for gold. • The Trump administration’s move to exempt Mexico and Canada from new tariffs temporarily halted the rally in gold. • Bitcoin fell below $90,000 following President Trump’s strategic Bitcoin reserve plan which failed to impress investors. • Australia shipped a record $2.9 billion in gold to the U.S. in January due to concerns about possible tariffs. • Gold’s key support lies at $2,900, and resistance levels at $2,928 and $2,945 will chart its next direction. Gold continues to consolidate while market players are weighing global economic events and policy changes. The Federal Reserve’s position on whether there will be rate cuts remains an important determinant, with Christopher Waller predicting two or three cuts this year. This coincides with the expectations of markets, particularly in light of the continued focus on inflationary pressure and labor markets. The U.S. Nonfarm Payrolls release on Friday is also seen to shed some light on the economy’s robustness, something that could feed into future decisions on monetary policy. XAU/USD Daily Price Chart Chart Source: TradingView At the same time, geopolitical and trade events also influence market sentiment. The Trump administration’s move to exempt Mexico and Canada from fresh tariffs temporarily dented investor sentiment, while US-China tensions remain a source of uncertainty. Recent record-high gold exports from Australia to the U.S. show the sustained demand for the metal in the wake of global trade tensions. Moreover, the surprise decline of Bitcoin after news of a strategic reserve highlights the volatility of the wider financial markets, potentially with an indirect impact on investor sentiment towards safe-haven assets such as gold. TECHNICAL ANALYSIS Gold continues to be in a state of consolidation, with the main technical levels dictating short-term price direction. Trading at around $2,917 currently, the metal finds immediate resistance at $2,928, with further up potential towards $2,945 as long as bullish pressure gains momentum. On the negative side, the psychological support of $2,900 continues to be important, serving as a buffer against falls. A fall below this level might open further downside to $2,874, where more buying interest could come in. Though the overall trend is still supportive based on hopes for future rate cuts, gold might need a new catalyst to move out of its present range and try to reach its all-time high of $2,956. FORECAST The bullish momentum in gold could gain strength if the Federal Reserve indicates more aggressive rate cuts in future meetings. A dovish bias, combined with economic uncertainty, might propel demand for the precious metal as a safe-haven. If gold is able to break above the $2,928 resistance level, it might set the stage for a move towards $2,945. A subsequent rally might challenge the all-time high of $2,956, particularly if geopolitical tensions or inflation worries return, making investors more interested in bullion. On the other hand, if future economic statistics, led by the U.S. Nonfarm Payrolls release, paint a robust picture of the jobs market, that could temper hope of early cuts, putting bearish pressure on gold. Breaking below the psychological $2,900 support would possibly set further declines in motion, with the next significant level of support found at $2,874. A firmer U.S. dollar or higher bond yields may also keep gold prices down, and that could trigger a possible retest of lower prices if positive momentum is lost.

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Commodities Gold

Gold Rallies in the Face of Intensifying Trade War: Safe-Haven Demand and Market Uncertainty Push Prices Up

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  • March 4, 2025
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Gold jumped more than 1% as intensifying trade tensions between the U.S., Canada, and China drove demand for the safe-haven asset. U.S. President Donald Trump announced tariffs on imports from these nations, leading to retaliatory actions, including a 25% tariff from Canada and up to 15% levies from China on U.S. agricultural goods. The trade war uncertainty, combined with weakening U.S. Treasury yields at a five-month low, has bolstered the appeal of gold. Technicals are pointing towards more bullish pressure, with the main resistance at $2,917 and possible support at $2,866. Market players are also watching Federal Reserve rate cut expectations, which have climbed to 85.6%, further shaping the path of gold. KEY LOOKOUTS • The back-and-forth tariffs among the U.S., Canada, and China are also sparking uncertainty and leading investors towards safe-haven investments such as gold. • The U.S. 10-year yield registered a five-month low at 4.11%, making gold even more appealing as a bet against economic unrest and inflation. • With 85.6% chances of a Fed interest rate cut within six months, falling interest rates would further continue gold’s momentum. • Gold is resisting at $2,917 while support at $2,866 is critical to break in order to avoid another fall in the market. Gold is gaining further traction as rising trade tensions between the U.S., Canada, and China push investors towards safe-haven. The move by the U.S. to impose retaliatory tariffs, such as Canada’s 25% tariff on American imports and China’s 15% tariffs on agricultural products, has increased market uncertainty. Meanwhile, U.S. Treasury yields fell to a five-month low of 4.11%, enhancing gold’s appeal as a hedge against economic turmoil further. As Federal Reserve rate cut hopes surged to 85.6% by June, decreasing interest rates could be supportive of gold prices further. From a technical standpoint, gold has resistance at $2,917, and support at $2,866 has to remain firm to avoid further downward pressure. Gold holds up as rising tensions in trade pressure safe-haven demand, while U.S. Treasury yields decline to a five-month low. Expectations for Federal Reserve interest rate cuts also stand at 85.6% and back bullish sentiment further, as central resistance at $2,917 and support at $2,866 will indicate the next move. • Tariffs imposed by the U.S., Canada, and China continue to fuel the uncertainty in markets and raise the safe-haven demand for gold. • Gold rose more than 1% and trades at about $2,910 on concerns of trade war and weakening U.S. Treasury yields. • The U.S. 10-year yield reached a five-month low at 4.11%, contributing to gold’s appeal as an alternative asset. • Market odds for a Fed rate cut within six months are up to 85.6%, further supporting gold’s bullishness. • Gold is encountering resistance at $2,917, with the record high of $2,956 the next big level to respect. • Support at $2,866 is vital to stave off more losses, with further support available at $2,842 in case selling rises. • Congested price bars signal uncertainty on the part of investors, while safe-haven demand is due to keep gold propped up against further backdrop of geopolitical and economic uncertainty. Gold continues to be in focus for investors amid rising trade tensions between the U.S., China, and Canada. The announcement by U.S. President Donald Trump to charge tariffs on Chinese and Canadian imports has sparked reprisals with Canada slapping a 25% tariff on American goods and China imposing 15% tariffs on major agriculture products. This back-and-forth trade war has spurred economic volatility, causing safe-haven asset demand to increase, such as gold. With global markets responding to the latest disagreements, investors are keeping an eye on further policy actions and economic reactions from the involved countries. XAU/USD Daily Price Chart Chart Source: TradingView Also, concerns regarding the general economic outlook still shape investor mood. The Federal Reserve is under mounting pressure to reduce interest rates, with market expectations for a rate cut by June reaching 85.6%. Geopolitical news, such as the U.S. temporarily suspending military aid to Ukraine, also contributes to the uncertainty. As inflation worries linger and economic growth continues to slow, the position of gold as a hedge against uncertainty will continue to be strong, rendering it an attractive asset for conservative investors. TECHNICAL ANALYSIS Gold continues to exhibit good momentum, building on its recent gains as market uncertainty persists. The price is currently consolidating in a tight band, demonstrating indecision from investors following last week’s volatility. The intraday Pivot Point of $2,879 is acting as the main support, with resistance at $2,917 being the next level to monitor for further upward movement. If the bullish momentum continues, a possible test of the all-time high of $2,956 is still on the cards. On the bearish side, $2,866 is a very important support level, corresponding to earlier lows. A fall below this level may result in additional selling pressure towards $2,842. Investors need to keep a close eye on these levels, as any breakout would determine the direction of the next trend. FORECAST The bullish momentum in gold is still intact as global uncertainties push investors towards safe-haven assets. If trade tensions between the U.S., Canada, and China continue to escalate, gold prices may witness a further rally. A breakout above the crucial resistance at $2,917 could drive prices towards the all-time high of $2,956. Moreover, growing hopes for a Federal Reserve rate cut by June can also add to gold’s upside, as lower interest rates make the U.S. dollar weaker and hence gold more desirable. If inflation fears continue along with slowing growth, gold could stay in favor, and upward pressure on prices would persist. Conversely, any easing of trade tensions or diplomatic breakthroughs can dampen gold’s safe-haven appeal. A rising U.S. dollar, potentially driven by more positive economic readings or lowered expectations for interest-rate cuts, would also serve as a potential damper for gold prices. In the event that selling builds momentum, falling through the significant support at $2,866 might lead to more losses to $2,842. More profound correction can

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