Gold has once again shattered its previous record highs, surpassing the $3,100 threshold on Monday and peaking at $3,127 before retreating slightly. At the time of writing, XAU/USD is trading at $3,119, up over 1%. The sharp rise is primarily driven by growing risk aversion amid heightened uncertainty surrounding U.S. trade policies and the looming April 2 “Liberation Day” tariff announcements.
Key Drivers Behind Gold’s Surge
U.S. Trade Tensions: U.S. President Donald Trump’s comments regarding the possible scope of tariffs have sent waves of concern through global markets. While Treasury Secretary Scott Bessent had suggested tariffs would be in the 10%-15% range, Trump hinted that they could be broader, saying: “Who told you 10 or 15? You might have heard it, but you didn’t hear it from me.” His statement pointed to the possibility of tariffs on all countries, escalating market uncertainty.
Recession Fears: Goldman Sachs recently raised the probability of a U.S. recession from 20% to 35%, driven by a decline in business and household sentiment. This shift in expectations has led to a significant increase in gold demand, as investors flock to the precious metal in search of a safe-haven asset amid concerns of a deeper economic slowdown.
Secondary Tariffs on Russian Oil: Trump’s threat to impose secondary tariffs of 25%-50% on countries buying Russian oil, if Moscow continues blocking efforts to end the war in Ukraine, has added further geopolitical tension. This potential move has contributed to the growing flight to safe assets like gold.
US Economic Data: Despite improving Chicago PMI figures for March, which rose from 45.5 to 47.6, suggesting some recovery, the index remains in contractionary territory for the sixteenth consecutive month. This signals a weaker economic outlook, further bolstering gold’s appeal.
Recession Pricing in Markets: The Chicago Board of Trade is now pricing in over 74 basis points of rate cuts by the end of 2025, indicating that markets are anticipating a significant economic slowdown. This dovish sentiment has weakened the U.S. dollar and supported higher gold prices.
Gold’s Technical Outlook
Bullish Momentum Continues: Gold is up nearly 19% this year, and the rally shows no signs of abating, thanks to ongoing uncertainty in both economic and geopolitical arenas. The Relative Strength Index (RSI) is currently in overbought territory, but traders should note that this aggressive upward momentum has pushed it to an extreme 80, suggesting that while gold remains in bullish territory, a correction could occur if conditions change.
Resistance Levels: The immediate resistance levels for gold are seen at the psychological $3,150 and $3,200 thresholds. A breach of these levels would indicate that gold’s rally could continue, with analysts eyeing a potential price target of $3,300 in the near future.
Support Levels: On the downside, $3,100 is the key support level, and a break below this could expose further support at the March 20 high turned support around $3,057. A more significant pullback would test the $3,000 mark.
Gold Price Outlook
As long as the uncertainty over U.S. tariffs, recession fears, and geopolitical tensions remain in play, the uptrend in gold is likely to continue. Goldman Sachs, Société Générale, and Bank of America have all updated their forecasts, with a $3,300 price target for gold in the coming months.
Gold’s safe-haven appeal is set to remain strong, particularly if the U.S. recession risks materialize and tariffs are imposed, creating further market volatility. In the short term, gold could see additional rallies toward the $3,150 and $3,200 levels, while traders remain cautious of any pullbacks that could offer entry points for new positions.
With the broader market grappling with trade uncertainties and economic concerns, gold is poised to continue its surge, making it an attractive asset for investors seeking protection against volatility.
Related topics：
- What is the Value of 18K Gold?
- Why Does Gold Price Increase During War?
- What is the Best Price Being Paid for Gold Sovereigns?
