Gold prices surged on Thursday, reaching an all-time high of $3,059 as trade uncertainties surrounding US President Donald Trump’s new tariffs escalated the global trade war. As of the latest update, XAU/USD stands at $3,051, marking an increase of over 1%.
The rise in gold prices follows Trump’s announcement of a 25% tariff on automobiles and automotive parts not produced in the United States. The uncertainty surrounding these trade policies prompted bullion traders to flock to the precious metal, pushing prices past the $3,050 level.
As risk sentiment worsened, Wall Street saw declines, and the US dollar also struggled. The US Dollar Index (DXY), which measures the dollar against a basket of six major currencies, dropped by 0.33% to 104.31.
The tariffs have sparked retaliation threats from global players, including Canada and the European Union (EU), against the US.
On the economic front, the US labor market remains strong, with the latest unemployment claims report showing ongoing resilience. Gross Domestic Product (GDP) data for Q4 2024 also confirmed solid economic growth. However, housing data revealed a continued slowdown in the housing sector.
Money markets have priced in 64.5 basis points of Federal Reserve easing in 2025, according to Prime Market Terminal’s interest rate probabilities.
Traders’ attention is now shifting to the upcoming release of the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge.
Market Updates: Gold, Bonds, and Economic Data
Despite concerns over trade tensions, gold prices remain resilient, hovering near the $3,000 mark. The US 10-year Treasury yield saw minimal movement, inching up one basis point to 4.371%. Real yields, as measured by the US 10-year Treasury Inflation-Protected Securities (TIPS), slipped by one basis point to 1.979%.
In labor market news, US Initial Jobless Claims for the week ending March 22 rose to 224K, slightly below expectations. Meanwhile, the final Q4 2024 GDP reading showed a growth of 2.3% QoQ, a slight increase from the prior estimate of 1.9%, but slightly below the 2.4% forecast. Pending Home Sales in February dropped 3.6% YoY, showing signs of stabilization after a larger 5.2% decline in January.
XAU/USD Technical Outlook: Gold’s Bullish Momentum
Gold reached a historic high of $3,059, driven by the trade policy developments and pre-PCE inflation data anticipation. With buyers dominating the market, a potential test of $3,100 is on the horizon.
The Relative Strength Index (RSI) indicates that buying momentum is strengthening, though traders should remain cautious of overbought conditions, particularly if the RSI reaches extreme levels near 80.
The next resistance for XAU/USD is at $3,059, and breaking through this level could open the door to $3,100. On the downside, gold’s first support lies at $3,050. If this level is breached, $3,000 could be the next target, followed by the February 24 swing high at $2,956, and further support at $2,900 and the 50-day Simple Moving Average (SMA) at $2,887.
