Gold Reclaims $3,000 as Trade War Fears Spark Safe-Haven Rush by Amit Gupta, Kedia Advisory
Gold prices surged back above the $3,000 mark on Wednesday as mounting global trade tensions and rising recession fears drove investors toward safe-haven assets. The move comes amid escalating US-China tariff threats, with the White House confirming a 104% tariff on Chinese imports effective today. Markets are also pricing in multiple Federal Reserve rate cuts this year, weighing on the US Dollar and supporting gold. However, rising US Treasury yields—fueled by speculation that China is dumping bonds in retaliation—could limit gains. Traders now await FOMC minutes and US inflation data later this week for fresh cues on the Fed’s rate path.
Key Highlights
- Gold reclaims $3,000 amid rising trade tensions, USD softness.
- White House confirms 104% tariff on Chinese goods begins today.
- Markets price in 5 Fed rate cuts in 2025; over 60% chance in May.
- China rumored to be selling US Treasuries, pushing yields higher.
- Technical resistance at $3,023; support at $2,956 and $2,952 (50-day SMA).
Gold prices jumped back above the $3,000 psychological level during Wednesday’s Asian session, buoyed by escalating fears of a global trade war and growing expectations of aggressive Federal Reserve rate cuts.
The White House confirmed on Tuesday that it would implement a 104% tariff on Chinese imports starting today. The policy escalation has deepened investor anxiety over a potential global recession, reviving demand for traditional safe-haven assets like gold.
Speculation that China is offloading US Treasuries in retaliation to tariffs has driven yields higher, tempering some of gold’s upside. Meanwhile, markets are pricing in more than five rate cuts by the Fed this year, with a 60% probability of a cut as early as May, according to CME's FedWatch Tool.
Despite hawkish remarks from Fed officials, including San Francisco Fed President Mary Daly and Chicago Fed’s Austan Goolsbee, the US Dollar remains under pressure for a second consecutive day—further boosting gold’s appeal.
Traders are now focused on the FOMC meeting minutes due later today, followed by key inflation data with the Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday. These events are likely to drive near-term USD movement and influence gold’s direction.
Technically, gold faces a stiff barrier at $3,022. A decisive move above could open the door to $3,055 and ultimately $3,100. On the downside, the 61.8% Fibonacci support at $2,956 and the 50-day SMA near $2,952 remain key levels to watch.
Finally
Gold’s renewed strength above $3,000 signals robust safe-haven demand amid trade war jitters, though US bond yields and inflation data could steer the next leg of movement.
Above views are of the author and not of the website kindly read disclaimer
