Gold prices advanced to fresh highs following a gap up over the weekend. Markets are bracing for tariffs which President Trump has now said would essentially cover all countries, stoking worries a global trade war could lead to a recession.
Trump’s remarks on Air Force One suggested the tariffs might not be limited to just a few countries with major trade imbalances.
He’s set to receive tariff recommendations on Tuesday, announce initial rates on Wednesday, and follow up with auto tariffs on Thursday.
Is Gold facing a case of buy the ‘rumor sell the fact’?
Golds excellent 2025 continues but the stark rise above the $3000/oz handle raises the question, how far can the rally go?
I do have a concern heading into tomorrow’s “liberation day” tariffs that this could be a case of buy the rumor, sell the fact. Markets appear convinced that the tariffs to be announced over the coming days are going to be widespread and received negatively.
However if the Trump administration has proven one thing it is that consistency is not its forte. As President Trump says one thing and delivers something completely different or walks back his initial proposal, in part at least.
Any such move this time around could lead to a selloff in the precious metal. Whether this move will be sustainable though is highly doubtful.
Recessionary fears are on the rise
Many economists fear tariffs could hurt the U.S. economy while also limiting the Federal Reserve’s ability to lower interest rates due to short-term inflation.
Goldman Sachs now estimates a 35% chance of a U.S. recession (up from 20%), expecting Trump to announce 15% reciprocal tariffs on all trading partners on April 2.
Friday’s data highlighted the risks: core inflation rose more than expected in February, while consumer spending fell short of expectations.
These developments continue to lend a supporting hand to safe haven demand and thus gold prices.
Final thoughts
Given the scenarios presented above, the week ahead looks to be a volatile one with a lot of whipsaw price action ahead.
Overall, recent developments mean that the bulls remain in charge. What we have seen of late is that when it comes to Gold, overall market sentiment seems to be the biggest driving force.
Technical Analysis - Gold (XAU/USD)
From a technical analysis standpoint, Gold prices have created fresh highs today and found resistance around the 3125 handle.
Looking at the H2 chart below we can see immediate support may be found at 3100 before the Friday close around the 3083 handle comes into focus.
On the upside, a recovery from here needs to make it to beyond the 3125 handle if bulls are to charge once more.
Such a move has the potential to develop in the Asian session as Gold continues to be a stellar performer.
Gold (XAU/USD) Two-Hour Chart, March 31, 2025
