Article by: ETO Markets
Gold prices are surging toward the $3,050 range as escalating concerns over an all-out global trade war and its potential to trigger a recession boost safe-haven demand. Investors are increasingly worried that tariffs, such as the recently confirmed sweeping 104% tariff on Chinese imports, could slow the US economy enough to compel the Federal Reserve to resume rate cuts—possibly five cuts in 2025—with market expectations already pricing in a significant chance of a reduction in May. This expectation, coupled with a weakening US Dollar marked by continued selling pressure for a second day despite some hawkish Fed comments, has reinforced upward technical momentum beyond key resistance levels around $3,022-3,023. Traders are now focused on the upcoming release of Fed minutes, along with critical US Consumer Price Index (CPI) and Producer Price Index (PPI) data, to gauge the future direction of monetary policy and its impact on both the USD and gold's trajectory.
From a technical perspective, the recent sharp decline from its record high appears to find a strong support level with a multi-week low touched on Monday and aligns with the 50-day SMA, currently near $…. A decisive break below this SMA could trigger bearish sentiment, potentially dragging the gold price down further to the next support at the $… horizontal zone and towards the $… round number. Conversely, if gold manages to sustain momentum and move beyond the overnight swing high at around $…, it may face resistance at the $…–… barrier, with follow-through buying potentially paving the way for a move toward reclaiming the $… mark after overcoming an intermediate hurdle near the $…–… region.
