- As we have often expected before, the recent gold sales were normal after a sharp and continuous upward trajectory, which moved the gold price index to the peak of $2957 per ounce, the highest in the history of gold prices.
- Obviously, the recent sales pushed the instant gold prices to decline to the support level of $2833 per ounce.
- Consequently, through the free direct trading recommendations page, we recommended buying gold and preparing for the peak of $2900 per ounce again.
- It is currently the closest to it, as the gold price is stable around $2895 per ounce at the time of writing the analysis. In general, gold prices have recovered after last week witnessed its worst week in three months.
Reasons for the Resurgence of Gold Prices?
According to the performance across the gold trading companies’ platforms, gold prices have recovered amid increasing demand for buying gold bullion as a safe haven, coinciding with the decline in the US dollar index. Uncertainty has increased in financial markets after the failure of Trump’s recent attempts to stop the Russian Ukrainian war after his meeting with the Ukrainian president, which represents a setback for markets from ending the European conflict, one of the factors that negatively impact markets and the future of global economic recovery.
On another level, it affects the gold market. The US administration’s approval of retaliatory tariffs on major economies, starting with Canada, Mexico and China.
Trading Tips:
What happened to the gold market confirms the strength of our advice for trading gold with a strategy of buying from every downward level, which is still in place. Also, as we always advise against taking risks, no matter how strong the trading opportunities are, and we do not advise buying from record peaks.
US Tariffs Revitalize the Gold Market
In this regard, Trump has pledged to impose a 25% tariff on imports from Canada and Mexico starting today, in addition to imposing a 10% tax on energy imports from Canada, which provides about 20% of US demand for crude oil. Also, the president raised tariffs on imports from China to 20% from 10%. Canada and Mexico have said they will impose retaliatory tariffs on US imports, threatening a full-scale trade war that could boost inflation and slow growth in those global economies.
Commenting on the impact on the gold market, Saxo Bank noted that “gold is trading higher after its first weekly loss this year amid concerns that Trump’s tariff plans will stoke inflation and slow economic growth, potentially triggering stagflation.” On another note, important upcoming US economic data, including the Purchasing Managers’ Index and US non-farm payrolls, could play a role as strong data could reinforce the Federal Reserve’s hawkish stance and put pressure on the gold market again.
US Stock Markets Negatively Affected by Trump’s Tariffs
During yesterday’s trading session on stock trading platforms, US stocks experienced sharp selloffs after US President Donald Trump confirmed the new tariffs, raising concerns about the economy. According to trading, the S&P 500 fell by 1.7%, its worst day since December, the Nasdaq 100 fell by 2.6%, and the Dow Jones fell by 649 points.
Overall, selling increased after Trump announced plans to impose tariffs on imported agricultural products starting April 2. In addition, the new tariffs, including a 25% tax on imports from Mexico and Canada and a 10% tax on Chinese goods, will go into effect tomorrow. The technology sector was hit hardest, with Nvidia shares falling 8.7% amid an investigation into whether its chips were illegally routed through Malaysia to avoid US export restrictions on China. Meanwhile, Broadcom stock fell 6% ahead of its earnings report. Likewise, Tesla and Amazon shares fell 2.8% and 3.2%, respectively.
In terms of economic data, the Institute for Supply Management report revealed a sharp slowdown in the US manufacturing sector, with the new orders index recording its largest decline since March 2022, while price pressures accelerated.
Gold Price Technical Analysis and Expectations Today:
According to the performance on the daily chart and in light of the positive expectations of gold analysts after breaking the resistance of $2,900 per ounce, expect more technical gold purchase deals and prepare for stronger upward penetrations, which will quickly pave the way towards the historical psychological resistance level of $3,000 per ounce sooner than previously expected. In contrast, and over the same period of time, the closest support levels for gold prices will currently be $2,865, $2,838, and $2,800 per ounce, respectively. The performance of real-time gold prices in the coming days will be affected by the performance of the US dollar and the extent of investors’ appetite for risk or not, in addition to the amount of global demand for buying gold bullion from major consumers such as India, China, and global central banks.
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