The Gold price (XAU/USD) has surged dramatically in recent days, rocketing from sub-$3,000 levels to a remarkable $3,132 on Thursday morning, creating a potential path toward a new all-time high.
This rapid ascent marks a jaw-dropping performance for the yellow metal, with the price gaining nearly 5% since Tuesday morning alone. In this article, TelaraX brokers provide expert insights into this topic.
The primary catalyst behind this surge is a series of announcements and actions from key geopolitical and economic figures, especially the evolving trade conflict between the United States and China.
As the equity markets rally on the back of a 90-day pause on reciprocal tariffs, gold is benefiting from its status as a safe-haven asset. The latest developments suggest that gold could even test fresh all-time highs later in the day, a level that has been eagerly anticipated by traders and investors alike.
Key Drivers Behind Gold’s Surge
On Thursday, gold was trading around $3,107 at the time of writing, representing an impressive move upward, with the price only a stone’s throw away from testing its previous all-time high of $3,167. The rally began with a significant announcement regarding a 90-day tariff pause for 56 countries and the European Union.
Under this new plan, the tariffs that had been set to increase would remain at a baseline rate of 10% for most of the affected countries. While this temporarily relieved some pressure on global trade, the decision to raise tariffs on China to 125%, effective immediately, sparked new fears of further escalation in the ongoing trade war between the two largest economies in the world.
This shift in the tariff landscape has prompted renewed volatility in global financial markets as investors seek safer investment alternatives. The People’s Bank of China (PBOC) has also contributed to the heightened market unease by continuing to weaken the Chinese Yuan (CNY) for the sixth consecutive session.
This move, despite warnings from US Treasury Secretary Scott Bessent, suggests that Beijing may use the currency as a strategic tool in trade negotiations, similar to tactics used during previous trade war phases.
The market’s reaction to these developments has fueled demand for gold, which has gained approximately 18% in value this year alone. Investors are increasingly turning to the precious metal as a hedge against the uncertain macroeconomic environment and the prospect of further geopolitical tensions.
The Fed’s Stance and Gold’s Support
Another critical element in the rally has been expectations surrounding monetary policy from the Federal Reserve (Fed). While the chance of an interest rate cut by the Fed in May has diminished to just 19.5%, compared to a more substantial 44.6% just two days ago, market expectations for further rate cuts in June have climbed to 75.3%.
The potential for additional monetary easing by the Fed supports gold prices by reducing the opportunity cost of holding the non-yielding asset. As gold is priced in dollars, a weakening dollar also contributes to the bullish trend in the metal.
Furthermore, the central bank’s buying of gold continues to bolster the market. According to Bloomberg reports, central banks around the world, including China and Russia, have been increasing their gold reserves as part of a strategy to diversify away from the US dollar. This long-term trend toward gold accumulation is expected to continue, reinforcing its role as a store of value in times of global economic uncertainty.
Gold’s Technical Outlook
Looking at the technical analysis of gold, the precious metal is testing crucial resistance levels in its march toward a potential new all-time high. As of Thursday, gold is testing the R1 resistance at $3,131, which is just below the previous all-time high of $3,167. Should the price break above this level, the next key resistance would be found at $3,180 (R2), which could act as a hard cap on the topside in the short term.
On the downside, the daily Pivot Point sits at $3,050, with the March 10 high at $3,057 offering additional support. If these levels fail to hold, bears could target the S1 support at $3,002, which is further reinforced by the $3,000 psychological level. A drop below this support zone could lead to more significant declines, with $2,950 and $2,900 as potential targets.
Conclusion
The rapid ascent of gold prices this week has set the stage for what could be a new all-time high. As global trade tensions escalate and concerns over the economy grow, gold’s safe haven status is increasingly being recognized by investors.
With critical technical levels in sight, the precious metal’s future looks poised for further gains, especially if the broader economic environment continues to deteriorate. Traders and investors alike will be watching closely as gold inches closer to its historic highs.
COMTEX_465096363/2922/2025-05-01T01:58:05
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