Gold surged past the $3,000 mark, reaching a new all-time high as investors flocked to safe-haven assets amid economic uncertainty. This milestone comes at a critical juncture, with market participants closely watching the U.S. Federal Reserve’s upcoming policy announcements. The revised dot plot, which outlines policymakers’ interest rate projections, could play a pivotal role in shaping gold’s valuation in the near term.
Despite potential fluctuations driven by Fed signals, the technical outlook remains firmly bullish. As gold continues to attract strong buying interest, traders will be looking for confirmation of the next directional move, with key resistance and support levels coming into focus.
Gold Rebounds as USD Weakens, Trade Tensions Rise
Gold recovered from a dip below $2,900, supported by a weakening U.S. dollar and increased demand for safe-haven assets. The week began on a bearish note, with gold closing lower on Monday. However, rising concerns over a potential economic downturn in the U.S. and escalating global trade tensions shifted market sentiment, allowing XAU/USD to regain traction in the first half of the week.
Over the weekend, U.S. President Donald Trump acknowledged the likelihood of a “period of transition” when questioned about the potential economic impact of his policies. On Monday, Wall Street’s major indexes experienced significant losses, and by Tuesday, heightened market volatility reflected growing uncertainty regarding the Trump administration’s trade stance.
On Tuesday, Trump announced an additional 25% tariff on steel and aluminum imports from Canada, adding to the previously declared 25% tariff. In response, Ontario Premier Doug Ford stated that Canada would impose a 25% surcharge on electricity supplied to over a million U.S. homes. Following these developments, the White House adjusted its position, confirming that only the originally planned 25% tariffs on steel and aluminum would take effect on Wednesday, without any exemptions.
By midweek, tensions escalated further as European Commission President Ursula von der Leyen confirmed that the European Union (EU) had implemented swift countermeasures in response to U.S. steel tariffs. Similarly, UK Trade Minister Jonathan Reynolds expressed disappointment over the decision, emphasizing that the UK would explore all available options and respond as necessary. Growing fears of a global trade war fueled demand for gold, reinforcing its safe-haven appeal.
On Wednesday, the U.S. Bureau of Labor Statistics reported that annual inflation, measured by the Consumer Price Index (CPI), eased to 2.8% in February from 3% in January. Core CPI, which excludes food and energy prices, rose by 3.1% year-over-year, following a 3.3% increase in January, but fell short of market expectations of 3.2%. Despite these figures, the data had little impact on financial markets, and gold continued its upward momentum, surpassing $2,900.
Late Thursday, gold broke above its previous record high of $2,956, attracting technical buyers and pushing past the $3,000 mark on Friday. Reports suggesting that the People’s Bank of China (PBoC) was considering a reduction in the reserve requirement ratio (RRR) by 25 to 50 basis points (bps) further supported the rally, allowing gold to extend its gains into the weekend.
Technical Outlook on the Gold Market: Gold Market Outlook: Key Levels in Focus Amid Profit-Taking
The gold market continues to gain bullish momentum, recently surging past the critical $3,000 level and reaching a peak of $3,055 before undergoing a slight correction. As profit-taking sets in, the $3,000 level could now serve as a higher support zone, potentially sustaining the ongoing upward trend.
Currently, the correction has brought prices back to the $3,000 threshold, making this level a pivotal point for the market’s next move. A decisive break below this support could trigger increased caution among traders, discouraging long positions. Conversely, a breakout above $3,055 may reinforce bullish sentiment, attracting further buying interest and potentially driving prices toward the $3,100 mark, signaling an extended bull run.
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