Article by: ETO Markets

Gold prices have rocketed higher, smashing through the $3,200.00 mark to post fresh record highs, driven primarily by escalating US-China trade tensions and growing expectations for US Federal Reserve interest rate cuts. Concerns surrounding US economic stability, fuelled by the imposition of a confirmed 145% effective tariff rate on Chinese goods and China's retaliatory measures, have significantly dented the US Dollar and bolstered gold's safe-haven appeal. Softer-than-anticipated US March Consumer Price Index (CPI) data further solidified market bets on aggressive Fed easing, adding considerable upward thrust to the precious metal, despite normally being a headwind. However, the sheer speed of the ascent raises the prospect of profit-taking, particularly given potential end-of-week market repositioning. Market sentiment remains overwhelmingly bullish, underpinned by fears of a trade war-induced global slowdown and anticipation of looser US monetary policy, though some caution is creeping in after the sharp rally. 

Technically, Gold (XAU/USD) is trading strongly near its recent peak, currently around $…after reaching an intraday high of $…. This fresh record high acts as immediate resistance, with the next significant psychological barrier potentially sitting at $…. Despite the powerful uptrend confirmed by price trading well above all key moving averages – like the SMA(20) at $…– several indicators suggest the rally might be overextended in the near term, hinting at potential for a bearish pullback. The Relative Strength Index (RSI-14) at 69.69 is approaching overbought territory, and the Stochastic oscillator (%K at 86.46) is deeply overbought. Initial support lies at the day's low of $…. Below that, the psychological level of $… could offer some footing before a more substantial support zone emerges around the $… mark, roughly aligning with the EMA(9) at $… and the SMA(10) at $….