- Summary:
- Gold price has risen for the last four days in a row and is up by nearly 20% year-to-date. With tariffs gathering pace, XAUUSD can only go up.
Gold price rose to new all-time highs of $3,149 on Tuesday, on the eve of US reciprocal tariffs, touted by President Donald Trump as “Liberation Day.” Despite toning down and stating that the tariffs would be “very kind” , Trump is likely to trigger a chain reaction of retaliatory tariffs, which could potentially grow to a world-scale trade war.
Most European nations, including long-term allies, the UK, have shown intent to institute counter-measures against the world’s largest economy. Furthermore, the escalating harsh trade relations is fanning recession fears, favouring continued upside by gold price.
The climate is almost certainly perfectly set for safe haven gold to experience surging demand, with central banks expected to increase their purchases of bullion to bolster their vaults. According to World Gold Council, central banks now account for 20% of gold purchases, nearly double the percentage between 2011-2022.
China has been at the forefront of the rising appetite, purchasing the yellow metal for the last four months in succession. More of the world’s largest economies will likely follow the trend in the coming weeks and months. That could see the US dollar lose a substantial portion of its safe haven allure, which could help propel XAUUSD higher.
Meanwhile, Trump could announce a different set of tariffs targeting specific goods like semiconductors and pharmaceuticals. That could increase the downward pressure in equities markets and add support to gold price. Down the line, US Non Farm Payrolls (NFP) data will be out on Friday, and will provide clues on the trajectory of the US economy in a high tariff environment.
Gold Price Prediction
The momentum on gold price calls for further upside above the pivot point at $3,124. The upward movement will likely encounter initial resistance at $3,145. An extended control by the buyers will breach that barrier and set the next target at $3,160.
On the other hand, going below $3,124 will shift the momentum to the downside. That will likely see the first support come at $3,108, below which the upside narrative will be invalid. Furthermore, that momentum could extend the downside to test $3,094.
