Gold prices continued to rise on Wednesday, staying close to all-time highs as market participants awaited US President Donald Trump’s highly anticipated tariff announcement, scheduled for 20:00 GMT. As of the latest update, XAU/USD traded at $3,122, gaining 0.28%.
The so-called “US Liberation Day” is set to bring significant tariff developments. Trump is expected to reveal reciprocal tariffs aimed at reducing the US trade deficit with its partners. The announcement follows last week’s disclosure of a 25% tariff on imported automobiles, with the suspension of tariffs on Mexico and Canada set to expire on April 3.
Recent media reports suggest three potential tariff options under consideration: a blanket tariff of 20%, tiered tariffs, or targeted duties applied on a country-by-country basis.
Suki Cooper, an analyst at Standard Chartered, noted, “If the tariffs are not as extensive as feared, some positioning could be unwound in gold, in which case the physical market floor will be key in setting the downside.”
Since Trump’s election, gold prices initially dipped but later rallied, climbing more than 23% from their low of $2,536 in November 2020. Despite rising US yields, gold prices have continued to rise, supported by the broad weakness of the US dollar, which has helped the precious metal maintain levels above $3,100.
US economic data has taken a backseat amid tariff concerns. The ADP National Employment Report for March showed that private sector hiring exceeded expectations, with businesses adding 155,000 jobs, well above the forecast of 105,000. Factory orders also rose by 0.6% month-over-month in February, slightly above the anticipated 0.5%, though slowing from January’s 1.8% surge.
Looking ahead, traders are focused on several key events, including Trump’s tariff announcement, the ISM Services PMI for March, March’s Nonfarm Payrolls, and a speech from Federal Reserve Chair Jerome Powell.
US Market Movers: Gold Prices Edge Up Amid Rising Yields
The US 10-year Treasury yield rose by three basis points to 4.19%, while US real yields also increased by three basis points to 1.862%, according to the 10-year Treasury Inflation-Protected Securities (TIPS).
Despite the uptick in yields, gold prices held steady, with traders eyeing the outcome of Trump’s tariff policy and upcoming economic data.
Meanwhile, the Atlanta Fed’s GDPNow model suggests that the US economy could contract by 3.7% in Q1 2025, down from a previous estimate of 2.8% on March 28. Futures markets are currently pricing in more than 73 basis points of interest rate cuts by the Federal Reserve.
Gold Price Technical Outlook: Consolidating Near Record Levels
Gold’s uptrend remains intact, though recent price action has been sideways as buyers have hesitated to push prices to new all-time highs. The Relative Strength Index (RSI) is above 70, signaling that gold is in overbought territory. However, given the strength of the trend, the RSI could reach as high as 80, suggesting further upside potential.
If gold remains above $3,100, buyers will retain control. A continued rally could push prices beyond the record high of $3,149, potentially targeting the $3,200 mark. On the other hand, a drop below $3,100 would open the door to support at $3,057, followed by the key psychological level at $3,000.
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