Key Points:
- Gold rises towards $3,030 per ounce
- U.S. tariffs on foreign auto imports heighten market concerns
- Federal Reserve signals caution on rate cuts, with focus on inflation
- Investors await the PCE report for more insights on U.S. inflation trends
Gold Climbs as Tariff Concerns Stir Safe-Haven Demand
Gold prices moved higher on Thursday, approaching historic highs near $3,030 per ounce, amid growing concerns over U.S. President Trump’s tariff plans.
These tariff measures have raised fears of a potential global economic slowdown, boosting demand for gold as a safe-haven asset.
U.S. Tariff Plans Stir Global Economic Fears
President Trump reaffirmed his commitment to imposing a 25% tariff on foreign automobiles, including cars, light trucks, and select auto parts. This announcement comes in anticipation of reciprocal measures to be announced on April 2. The tariff measures have sparked fears of escalating trade tensions, particularly with countries like China, the EU, and Japan, who are likely to retaliate, further exacerbating global economic uncertainty. Gold, traditionally a hedge against such risks, has gained 15% this year, reflecting investor caution.
Technical Analysis
Picture: XAUAUD tests resistance at $4800.49 after a steady climb from $4767.92, as seen on the VT Markets app.
XAUAUD increased by 0.05%, closing at $4799.11 after opening at $4796.87. The session saw a steady rise, reaching a high of $4811.75 before slightly retracing.
The moving averages (MA 5,10,30) indicate bullish momentum, with short-term MAs crossing above the longer-term moving averages. This suggests a continuation of upward price movement. The MACD (12,26,9) shows strong bullish momentum, with the histogram expanding and the MACD line (blue) staying above the signal line (yellow), confirming a prevailing bullish trend.
Key levels to monitor include $4800.49 as immediate resistance and $4767.92 as key support. A break above resistance could signal further upside momentum, while a drop below support could lead to downward pressure.
Federal Reserve Signals Caution Amid Inflation Concerns
In addition to trade concerns, the Federal Reserve’s stance on monetary policy has kept gold in demand. While the Fed maintained its forecast for two rate cuts by the end of 2025. Gold’s rise also aligns with expectations of continued economic challenges, particularly with inflation running higher than usual and the uncertainty surrounding the future economic impact of tariffs.
PCE Data Expected to Impact Gold’s Trajectory
The market now eagerly awaits the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, due on Friday. This data is crucial in understanding whether the Fed will adjust its policy stance further, which could significantly influence gold prices.
