Gold prices experienced a significant surge of over 2.5% on Wednesday, jumping to nearly $3,070, as the US tariffs were switched on, heightening global economic tensions. The surge in gold’s value comes amid an escalating trade war between the United States and China, compounded by warnings from the United States Secretary of the Treasury, Scot Bessent, about the economic implications of China’s retaliatory measures. A detailed perspective on the topic is presented by TelaraX‘s brokers in this article.
The broader market seems to be reacting to the growing uncertainty as the price of Gold (XAU/USD) recovers, bouncing back from the sub-$3,000 range to around $3,045 at the time of writing.
US Tariffs Trigger Gold Price Rally
As the US tariffs on Chinese imports officially came into effect this week, markets had expected some last-minute reprieve. Rumors swirled that the US President might pause the tariffs for 90 days for all countries except China, but the White House quickly dismissed these claims, labeling them as “fake news.” The shift from hopes of a negotiated solution to the actual implementation of tariffs sent shockwaves through financial markets, especially in commodity sectors like gold.
Christopher Wong, a foreign currency strategist at Oversea-Chinese Banking Corp., commented on gold’s recent rally, stating that “Gold’s rebound reflects growing investor anxiety over tariff threats and the potential reshaping of global trade norms.” Wong further noted that in a more disorderly global economy, gold remains a reliable hedge, emphasizing its ability to perform well when investor sentiment is dominated by uncertainty.
China Retaliates and Bessent Issues a Warning
In direct response to the US tariffs, China announced its retaliatory measures. Chinese Finance Minister Lan Fo’an revealed that an additional 84% of tariffs would be imposed on all US goods, with these measures set to take effect on April 10. This escalation in the trade war between the world’s two largest economies further contributed to the volatility in global markets, with investors seeking the safety of gold amidst the growing risks.
United States Secretary of the Treasury, Scot Bessent, cautioned China against escalating the trade dispute. Bessent urged China to come to the negotiating table rather than resorting to retaliatory tariffs.
Furthermore, he warned China not to devalue its currency in an attempt to counterbalance the effects of the tariffs. Bessent’s comments highlight concerns over potential currency manipulation as a strategy to absorb the shock of higher tariffs, a move that could destabilize markets even further.
Bessent’s warnings underscore the complex nature of the ongoing trade dispute and the geopolitical risks that could reverberate through global financial systems. With these trade tensions intensifying, market participants have been increasingly flocking to safe-haven assets like gold, which remains an attractive alternative in times of crisis.
Gold Price Technical Analysis: What’s Ahead?
As the tariffs took effect, gold’s price movement reflected heightened investor uncertainty. Initially, there was some expectation that a last-minute delay or solution might emerge, softening the immediate impact of the tariffs. However, with the duties now fully implemented, there has been a notable rebound in gold prices.
At the time of writing, the price is testing the R1 resistance at $3,041, and the next key resistance level lies at $3,057, a pivotal zone that was last tested on March 20. If gold manages to break through these resistance levels, it could push toward the R2 resistance at $3,089, with the all-time high of $3,167 still looming in the background. Should gold continue to rise, it may eventually reach new record highs, driven by growing demand for safe-haven assets.
On the downside, gold’s price is currently supported by the $3,000 region, which aligns with the pivotal level of the March 14 high. If this support fails, the next significant support levels are at $2,964 (S1), $2,955, and $2,945 (S2), which could act as key buying zones. These support levels will be closely monitored by traders, as a failure to hold at these levels could signal further downside movement for gold prices.
Conclusion: Will the Trade War Resolution Bring Stability?
Despite recent developments in the trade war and the implementation of US tariffs, the future trajectory of gold prices remains uncertain. The escalating tensions between the US and China, coupled with warnings from financial leaders like Scot Bessent, indicate that the global economy is facing considerable risks. Gold’s rally in the face of these risks underscores its status as a safe-haven asset.
As the situation develops, market participants will closely monitor the Federal Reserve’s policy moves, China’s retaliatory actions, and any potential resolutions to the ongoing trade war. For now, gold remains an attractive asset for investors seeking stability in a tumultuous global economic environment.
COMTEX_465026310/2922/2025-04-29T04:23:48
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