Gold prices surged on Tuesday, closing higher as traders flocked to the precious metal amid rising uncertainty over U.S. President Donald Trump’s potential tariff actions. The price of gold (XAU/USD) soared over 6.5%, reaching $3,240 per troy ounce by the end of the New York session.
The rally was fueled by a drop in U.S. Treasury bond yields for the second consecutive day, alongside growing concerns over Trump’s plans to impose tariffs on pharmaceuticals, which dampened investor sentiment. The mood was further soured as China ordered its airlines to halt Boeing jet deliveries, intensifying the ongoing trade tensions between the U.S. and China.
In U.S. economic data, import prices showed little movement, while the New York Fed Manufacturing index came in better than expected for April, although the outlook for the next six months deteriorated. Meanwhile, the price of goods paid by businesses rose into expansionary territory, signaling inflationary pressures.
Looking ahead, gold traders are set to monitor key economic releases, including March Retail Sales and remarks from Federal Reserve officials, particularly Fed Chair Jerome Powell, on Wednesday. Investors will also keep an eye on housing data and Initial Jobless Claims later in the week.
Market Highlights:
U.S. 10-year Treasury yields fell to 4.339%, while real yields dropped to 2.149%, further supporting gold’s upward trajectory.
The NY Empire State Manufacturing Index improved to -8.1 in April from -20 in March, hinting at a decline in business activity despite some improvement in the overall index.
March Retail Sales are expected to rise by 1.3% month-over-month, signaling potential consumer spending weakness, while Industrial Production may decline by 0.2% month-over-month, indicating slowing economic momentum.
Technical Outlook: Gold’s uptrend remains strong, with the price eyeing the $3,250 mark. A break above the all-time high of $3,245 could propel the metal to new record highs, with $3,300 in sight. On the downside, a drop below $3,200 could lead to support levels at $3,176 and $3,100.
