Gold prices soared past the $3,000 mark, reaching a record high of $3,038 on Tuesday as market uncertainty deepened over U.S. President Donald Trump’s impending reciprocal tariffs set to take effect on April 2. Investors are also closely monitoring the Federal Reserve’s upcoming monetary policy decision. As of now, XAU/USD is trading at $3,037, up 1.20%.
Market Sentiment and Key Drivers
Risk appetite remains fragile despite some relief from discussions between Trump and Russian President Vladimir Putin, who reportedly agreed to a 30-day pause in attacks on Ukrainian energy infrastructure. However, gold’s rally remains intact, with the metal gaining over 15% year-to-date.
Escalating tensions in the Middle East further fueled the surge in XAU/USD, as Israeli airstrikes killed more than 400 people in Gaza, jeopardizing a two-month ceasefire, according to Reuters.
On the economic front, U.S. data showed industrial production surged 0.7% in February, exceeding forecasts, while housing data was mixed—building permits fell, but housing starts saw a sharp rise.
Meanwhile, traders anticipate the Federal Reserve will maintain interest rates on Wednesday, with a 66% probability of a rate cut in June, according to the CME Group’s FedWatch Tool. Falling U.S. Treasury yields and a weaker dollar also bolstered gold, with the 10-year T-note yield dropping to 4.183% and the U.S. Dollar Index slipping 0.17% to 103.23.
Technical Outlook: Gold Poised for Further Gains
Gold’s bullish momentum suggests further price advances beyond its year-to-date high of $3,038. If buyers push past this level, the next resistance targets are $3,050 and $3,100. While the Relative Strength Index (RSI) indicates overbought conditions, the strong trend suggests the rally could extend.
On the downside, if gold retreats below $3,000, key support levels lie at $2,954 (February 20 daily high) and $2,900.
