Gold prices reached a new all-time high above $2,900 on Monday following President Trump's announcement of 25% tariffs on steel and aluminum imports. The move sparked fears of a global economic slowdown and inflation, driving investors towards the safe-haven metal. Despite this bullish momentum, traders are closely watching for any hawkish signals from Fed Chair Jerome Powell during his upcoming testimony to Congress.
Gold prices surged to a record high above $2,900 on Monday following President Donald Trump's announcement of 25% tariffs on steel and aluminum imports. Traders, seeking refuge from potential economic disruptions and rising inflation fueled by these trade policies, drove demand for the non-yielding metal. The XAU/USD pair reached an all-time high of $2,911 before settling at $2,905.
Trump's tariffs, which will impact imports from Canada, the United Arab Emirates, Mexico, and other countries, triggered a rally in gold prices, with market participants anticipating a slowdown in global economic growth. This unexpected positive market sentiment was reflected in the performance of Wall Street, which remained in positive territory, and the strengthening of the US Dollar alongside gold.Despite this bullish momentum, Federal Reserve officials are expressing cautious optimism. Traders are intently watching for any hawkish hints from Fed Chair Jerome Powell during his upcoming testimony to the US Congress. Powell's comments could significantly influence gold's trajectory. The US economic calendar will feature key data releases, including Fed speeches, inflation figures, employment indicators, and retail sales, which will further shape market sentiment and gold prices.Central bank demand has also contributed to gold's recent strength. The World Gold Council (WGC) reported that central banks bought over 1,000 tons of gold for the third consecutive year in 2024, with purchases surging by over 54% year-on-year to 333 tons following Trump's victory. This increased demand from global central banks underscores gold's perceived safe-haven status and its role as a valuable asset during times of economic uncertainty. Gold's technical outlook suggests that the uptrend is likely to continue unless the price closes below $2,900, which could trigger a pullback. However, as long as the Relative Strength Index (RSI) remains below the extreme reading of 80, bulls could maintain upward pressure on prices. Resistance levels are seen at $2,950 and $3,000, while support levels are located at $2,850, $2,790, and $2,730.
GOLD TARIFFS INFLATION ECONOMIC SLOWDOWN CENTRAL BANKS FEDERAL RESERVE GOLD PRICES INVESTMENTS MARKETS
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