Gold prices continued their upward trajectory on Tuesday, hitting a new record high of $3,500 per ounce in early Asian trading. However, the precious metal experienced a slight pullback, dipping to around $3,460 at the time of writing, as profit-taking kicked in at the psychologically significant $3,500 level. This price action comes as markets return to normal after the Easter holiday period, which saw reduced trading volumes due to bank holidays on Good Friday and Easter Monday.
Trump’s Attacks on the Federal Reserve Spark Gold Surge
The recent rally in gold is primarily driven by growing uncertainty surrounding the independence of the Federal Reserve (Fed) and the ongoing pressure on its Chairman, Jerome Powell. U.S. President Donald Trump has been vocal in blaming Powell and the Fed for keeping interest rates high, despite his calls for immediate rate cuts. Trump has suggested that he is exploring ways to replace Powell with a Fed chair of his choosing in order to secure quicker rate reductions.
This move has sparked concerns among investors that the U.S. central bank’s independence could be compromised, sending the U.S. dollar to its lowest level since 2022, as reflected in the U.S. Dollar Index (DXY). Bloomberg reports that traders are increasingly viewing this as a significant threat to market stability.
Gold Positioned as a Safe-Haven Asset Amid Market Volatility
With the U.S. dollar under pressure and concerns about U.S. assets—particularly Treasuries—mounting, many investors are turning to gold as a safe-haven investment. Analysts from Jefferies highlighted that gold is likely “the only true safe-haven asset left” in light of recent market developments, including the sell-off in U.S. Treasuries and the ongoing trade war with China. “We believe gold is the only true safe-haven asset left,” said Jefferies analysts in a note on Tuesday, as reported by Reuters.
This view comes as investors begin to question the reliability of U.S. assets in the face of ongoing political and economic risks. Jefferies also singled out Endeavour Mining Plc and Dundee Precious Metals Inc. as preferred picks in the mining sector ahead of upcoming earnings reports.
Gold Price Technical Outlook: Consolidation Expected
From a technical perspective, the gold rally may need to consolidate before extending further. The precious metal reached a fresh all-time high of $3,500 on Tuesday, but there is now some resistance at these levels. The intraday R2 resistance at $3,494 has already been tested, and the $3,500 mark has proven to be a key psychological barrier.
If gold manages to close above the R1 resistance at $3,447 on a daily basis, further gains are possible, and new all-time highs could still occur in April. However, on the downside, the daily pivot point stands at $3,395, but the more significant support lies at $3,360, which coincides with the April 17 high. If that level breaks, further downside may target the S2 support at $3,296, and potentially the April 11 high of $3,245.
In conclusion, gold continues to benefit from a mix of geopolitical uncertainty, trade tensions, and concerns about the U.S. Federal Reserve’s independence, positioning it as the preferred safe-haven asset amidst broader market volatility.
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