Gold (XAU/USD) maintains its bullish trend for the fourth consecutive day, reaching new record highs during the Asian session on Tuesday. Continued uncertainty surrounding US President Donald Trump’s expected announcement of reciprocal tariffs later today, alongside persistent geopolitical tensions, is fueling safe-haven demand for the precious metal.
Trump’s plan to impose tariffs on a broader range of countries, including those with major trade imbalances, has exacerbated concerns about a potential global trade war. This, coupled with fears that these tariffs could trigger a slowdown in the US economy, is pushing investors toward gold as a safer asset.
The expectation that the Federal Reserve may resume its rate-cutting cycle in response to a tariff-induced slowdown has also helped keep US Treasury bond yields subdued, limiting support for the US Dollar. This has further bolstered gold’s appeal as a non-yielding asset.
Despite improving global risk sentiment, which typically weighs on gold prices, the momentum remains strong. The yellow metal has posted its best quarterly performance since 1986 and reached a fresh record high on Tuesday.
Geopolitical tensions are also supporting gold’s upward move. Ukrainian officials reported Russian airstrikes on Kharkiv, while Israel’s renewed air and ground strikes against Hamas and the possibility of further military operations in Gaza have heightened fears of escalating conflict.
Market participants are closely watching this week’s key US economic data, including the JOLTS openings, ISM Manufacturing PMI, ADP report, ISM Services PMI, and the critical Nonfarm Payrolls (NFP) report on Friday. However, the main event remains Trump’s reciprocal tariffs announcement, set for later today at 19:00 GMT, which could significantly influence global risk sentiment and USD dynamics.
From a technical standpoint, gold’s price remains in overbought territory, with the Relative Strength Index (RSI) above 70. This suggests the potential for near-term consolidation or a modest pullback before the next leg up. Support is expected around the $3,100 and $3,128-3,127 range, with the $3,000 mark serving as a critical psychological level for traders.
Gold remains in an uptrend, but caution is advised as market participants await key developments in the trade and geopolitical landscape.
