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Gold prices shattered records on Friday, surging to an all-time high of $3,086 as investors flocked to the safe-haven metal amid escalating global trade uncertainty and shifting U.S. monetary policy expectations. The XAU/USD pair traded at $3,079, marking a robust 0.79% gain, fueled by a weakening U.S. dollar and sliding Treasury yields. With President Donald Trump’s looming April 2 “Liberation Day” tariff deadline—imposing a steep 25% levy on all imported cars—market jitters intensified, prompting retaliatory murmurs from Canada and the European Union (EU). Meanwhile, despite a slight uptick in the Federal Reserve’s preferred inflation gauge, traders are betting on a dovish Fed, pricing in 73.5 basis points of rate cuts for 2025.
The backdrop to gold’s rally is a cocktail of geopolitical tension and economic unease. Trump’s executive order has sent shockwaves through global markets, with Canada and the EU gearing up for counterstrikes, adding fuel to an already pessimistic market mood. The U.S. Dollar Index (DXY) slipped 0.11% this week, underscoring the greenback’s struggles and boosting precious metals. U.S. 10-year Treasury yields plummeted ten basis points to 4.259%, while real yields, tracked via Treasury Inflation-Protected Securities (TIPS), dipped to 1.887%. Investors, seeking refuge, poured into gold and the Japanese Yen, amplifying Bullion’s ascent.
Economic data offered a mixed picture. The Core Personal Consumption Expenditures (PCE) Price Index, a key Fed inflation metric, ticked up to 2.8% year-over-year in February, slightly above January’s revised 2.7%, yet broadly in line with expectations. However, inflation remains stubbornly above the Fed’s 2% target. Adding to the gloom, the University of Michigan’s Consumer Sentiment Index fell to 57.0 in March from a preliminary 57.9, reflecting growing household pessimism. Inflation expectations also climbed, with one-year forecasts hitting 5% and five-year outlooks rising to 4.1%. Despite these pressures, San Francisco Fed President Mary Daly maintained a steady outlook, projecting two rate cuts in 2025 while emphasizing her laser focus on taming inflation.
Gold’s technical outlook mirrors its bullish fervor. After smashing through $3,050, the yellow metal now has its sights set on $3,100, with momentum suggesting potential climbs toward $3,150 or even $3,200 if the uptrend holds. The Relative Strength Index (RSI) has crossed 70, signaling overbought conditions, though it remains shy of extreme levels near 80. Should profit-taking emerge, a drop below March’s high of $3,057 could trigger a retreat to the psychological $3,000 mark. For now, however, gold’s trajectory points upward, buoyed by safe-haven demand and a faltering dollar.
Looking ahead, markets are bracing for a packed U.S. economic calendar. The April 2 tariff announcement looms large, alongside key releases like the ISM Manufacturing PMI, JOLTS Job Openings, and Nonfarm Payrolls. As global tensions simmer and monetary policy expectations evolve, gold’s glittering rally shows no signs of dimming, with $3,100 firmly in its crosshairs.
Source: Prime Market Terminal
