Daily Price Outlook
Gold price (XAU/USD) delivered a jaw-dropping rally in Thursday trading, surging nearly 5.00% since Tuesday and hovering around the $3,130 mark. The bullish momentum comes amid escalating US-China trade tensions, renewed safe-haven demand, and shifting Federal Reserve rate cut expectations.
Gold Gains as US-China Tariff Clash Sparks Safe-Haven Demand
As we mentioned, the yellow metal found strong support after US President Donald Trump announced a 125% tariff on Chinese imports, immediately following Beijing’s move to impose an 84% tariff on all US goods starting Thursday.
Meanwhile, Trump temporarily paused higher tariffs on 56 other countries and the European Union, setting a baseline rate of 10%. These developments have stoked fears of a prolonged economic conflict between the world’s two largest economies, reviving investor demand for safe-haven assets like gold.
Yuan Weakness and Currency Tensions Add to Gold's Appeal
Further supporting gold’s rally, the People’s Bank of China (PBOC) devalued the Chinese Yuan (CNY) for the sixth consecutive session, despite warnings from US Treasury Secretary Scott Bessent.
Markets interpret this as a strategic move by Beijing, echoing past tactics from earlier trade war episodes. The weakening Yuan added to global market volatility, pushing investors toward gold’s relative stability.
Fed Rate Cut Bets and Central Bank Buying Support Gold
On the monetary policy front, the CME FedWatch Tool shows that expectations for a rate cut in May have sharply declined to 19.5%, down from 44.6% earlier this week. However, markets still see a 75.3% chance of easing in June.
Despite recent hawkish Fed commentary, broader investor sentiment continues to lean toward future monetary easing, providing additional support to the non-yielding precious metal.
Gold is also gaining long-term bullish traction as central banks increase bullion holdings amid growing global uncertainties. Historical patterns—such as the post-2008 Global Financial Crisis rally—suggest sustained upside potential as financial assets fail to deliver safe-haven value.
GOLD (XAU/USD) – Technical Analysis
Gold is consolidating just below $3,120 after a sharp two-day rebound from the $3,002 support zone. Price action has now reclaimed the 50-period SMA at $3,077, signaling a short-term bullish shift.
However, the rally is approaching a key barrier at $3,137—a horizontal resistance level that rejected prices twice last week. If bulls manage to close above this level, the next upside targets lie at $3,168 and $3,199.
On the downside, a pullback toward $3,108 could offer a buying opportunity. Immediate support rests at $3,077, followed by a stronger floor near $3,037. The RSI at 63.8 reflects improving momentum, though nearing overbought territory. Until price breaks above $3,137, we may see some sideways consolidation.
Gold is showing strength above the $3,077 level, but bulls need a decisive break above $3,137 to sustain momentum. Watch for a dip to $3,108 for potential entry.
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