Gold reached a record price of $2,956 on Monday, before stabilising around $2,940 on Tuesday following the Trump administration’s announcement of additional tariffs. This includes tougher restrictions on China’s technology and semiconductor industry.
Market reactions have been negative, prompting traders to seek refuge in bonds, which has led to decreased yields. Equities have suffered as a result, with declines marked across multiple regions, including US futures, while attention turns to the upcoming Personal Consumption Expenditures report.
The Federal Reserve’s interest rate cut expectations are now at 50.0% for June, increasing due to lower US yields, while the likelihood of pausing rates has fallen to 32.6%. Economic indicators and Fed speeches are anticipated, dealing with inflation and financial stability.
Gold is facing selling pressure, with S1 support currently holding at $2,930. Notably, the previously set all-time high remains pivotal, with resistance identified at $2,964 and $2,977.
Tariffs aim to boost local producers but also risk escalating trade wars, creating mixed views among economists. Trump’s intentions focus on leveraging tariffs to strengthen the US economy leading up to the 2024 elections.
Overall, Gold’s trajectory is influenced by tariffs and broader economic signals, as traders monitor developments closely.
Gold surged to an all-time high before settling slightly lower, following fresh trade measures targeting China. These steps, aimed primarily at tightening restrictions on high-tech sectors, have led to a swift response from markets. Bond yields have dropped as investors seek safety, while stock markets have stumbled, with futures pointing downward.
The focus now shifts to inflation data, particularly the Personal Consumption Expenditures report, which will provide insight into spending patterns and potential shifts in Federal Reserve policy. Expectations for a rate cut in June have climbed, largely driven by falling US yields, while the probability of keeping rates unchanged has slipped. Upcoming speeches from central bank officials will be closely analysed, particularly for their views on inflation trends and broader financial risks.
Gold, which saw strong upward momentum, is now under some selling pressure. Current price levels suggest buyers remain active around $2,930, a level which has provided support. On the upside, previous highs near $2,964 and $2,977 act as barriers that participants will be watching. If prices lose traction below support, further downward moves could follow.
The latest measures on trade have stirred debate. Some argue they support local industries, though others warn of escalating tensions with China. As election season approaches, there seems to be a clear attempt to use trade policies to reinforce economic positioning. The effects of these actions will take time to unfold, but traders must now weigh the impact on broader markets.
With all this in motion, traders are paying close attention to policy developments and fundamental indicators. Price action in gold and other assets will likely be shaped by shifting expectations, with movements in interest rates and trade policy playing a central role.
