Gold prices continue their record-breaking ascent, closing in on the $3,150 psychological level during Asian trading on Tuesday. This rally, fueled by ongoing concerns over U.S. trade tariffs, has kept investors engaged, while traders eagerly await the U.S. announcement of “reciprocal tariffs” on Wednesday, hoping for a fresh directional catalyst.
Gold’s Resilience Amid Tariff Woes
Gold’s impressive rally shows no signs of slowing down, as tariff-related jitters continue to overshadow concerns about the metal being in overbought territory. Early Tuesday, the price of gold saw a fresh leg higher after pulling back slightly from record highs reached during Monday’s U.S. trading session. This surge follows renewed tensions surrounding President Donald Trump’s controversial tariff plans, as he rejected proposals for narrower tariffs in favor of his broader “reciprocal tariffs” plan that targets all countries engaging in trade with the U.S.
U.S. Treasury Secretary Scott Bessent highlighted what he described as the “Dirty 15,” referring to the 15% of countries with high tariffs that trade heavily with the U.S. Bessent confirmed that President Trump would announce these new tariffs on April 2 at 19:00 GMT. This sparked fresh concerns about the economic impact of trade barriers, and the possibility of a stagflation scenario in the U.S. has weighed heavily on the U.S. Dollar (USD). As the prospect of rising tariffs threatens to undermine U.S. economic growth, gold has benefitted from an uptick in demand, further exacerbating the decline of the USD and U.S. Treasury bond yields.
Central Bank Buying and ETF Inflows Fuel the Rally
Amid the market volatility and heightened uncertainty, gold continues to benefit from increased buying activity from central banks and a surge in inflows into exchange-traded funds (ETFs) that track the precious metal. These developments, combined with the ongoing concerns about global trade and economic instability, have propelled gold prices toward their best quarterly performance since 1986.
However, despite the strong upward momentum, there are some concerns that gold could experience a pullback in the coming sessions. Traders may take profits ahead of the highly anticipated tariff announcement on April 2, with markets likely bracing for significant volatility once the “reciprocal tariffs” are implemented.
Gold Price Technical Analysis: Daily Chart
Looking at the technical side, the 14-day Relative Strength Index (RSI) on the daily chart indicates that gold is in overbought territory, currently sitting at 78.50. This suggests that buying momentum may be slowing down, and a brief pullback could be imminent.
If a correction occurs, gold could pull back toward the $3,100 round level, with the next key support seen at Monday’s low of $3,077. Below that, the psychological barrier of $3,050 could come into play as a potential support level.
On the bullish side, gold buyers would need to maintain momentum and push the price above the $3,150 level to trigger a new advance toward the next target of $3,200. However, with the RSI indicating that the market is overheated, some caution is warranted, as the metal could see short-term profit-taking before resuming its bullish trend.
Outlook
Overall, gold’s impressive rally remains driven by heightened geopolitical risks, concerns over trade wars, and a shift in central bank behavior. Despite being technically overbought, the fundamentals remain strong, and the metal is well-positioned to capitalize on market unrest and further tariff-related uncertainties. However, traders should keep an eye on key levels for potential pullbacks, particularly as gold approaches its record highs and the market braces for volatile economic data and tariff announcements in the coming days.
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