- Summary:
- Gold price is upbeat after US President Donald Trump announced 25 percent auto tariffs, days before new reciprocal tariffs kick in.
Gold price rose to new record highs of $3,086 on Friday, after US President Donald Trump added fuel to trade tariff fears with 25% levy on auto imports into the country. The precious metal is likely to stay on the ascending channel as the market waits for a new set of “reciprocal” tariffs starting April 2.
However, the US dollar has support from economic data released on Wednesday, which have eased concerns that a recession could be on the cards. US GDP grew at a slower rate of 2.4% in Q4 2024, down from 3.1% in the third quarter but higher than the median forecast figure of 2.3%. Initial Jobless Claims also came out better than expected in the week ending March 20, at 224,000 versus the forecast 225,000.
Nonetheless, the momentum on gold price is likely to stay strong, as the nations affected by the US auto tariffs are likely to impose retaliatory tariffs, further escalating risk sentiment. The tariffs could affect up to $400 billion worth of auto exports to the US, equivalent to nearly 10% of all imports into the country. Looking ahead, US Personal Consumption Expenditure (PCE) figures will be out later on Friday, and will add impetus to gold price momentum.
Gold Price Prediction
Gold price pivots at $3,070 and the momentum indicator signals that the upside will prevail if the price stays above that level. With the buyers in control, the metal will likely meet the first resistance at $3,085. Breaking above that level will signal a stronger momentum on XAUUSD that could open the path to test $3,100.
On the other side, the momentum will shift to the downside if the price breaks below $3,070. That could see the first support established at $3,057. Breaking below that level will invalidate the upside narrative. In addition, such a move could result in a stronger downward momentum to test $3,040.
