Even gold prices have skyrocketed to record highs. Global markets are understandably on edge as we await a final announcement from President Donald Trump on just how much new tariffs will amount to. As a result, the XAU/USD pair skyrocketed to an unprecedented $3,128.14. At the same time, the 20 Simple Moving Average (SMA) is located at the $2,991.20 level. Despite a slight pullback, the precious metal has managed to retain most of its gains during the mid-American session, attracting buyers eager to capitalize on the price surge.
The market’s present volatility is being fueled by fears and fears of tariff announcements to come. President Trump intends to announce new punitive tariffs before the end of the week. This change has the potential to significantly alter the environmental impact of global trade. Reports and speculation regarding possible ANSI counter-measures have captured the headlines. This excitement is creating concern in the financial markets as the week begins.
Despite all these developments, technical indicators for the XAU/USD that are extreme continue to sit at extreme levels. They are beginning to roll over some of their bullish momentum. They’re still on their way north, which bodes well for continued upward movement in gold prices. The 4-hour chart shows that the indicators have recently retreated from their tops. Yet, they remain dangerously perched in overbought territory, indicating that further price fluctuations could be in store.
Tariffs are currently at a near-historic high. So much so that they now rival levels not seen since the end of World War II. Since taking office, President Trump has been on a historic rampage of tariff increases. These modifications have increased the trade-weighted average tariff rate on all US imports by roughly 5.5 to 6.0 percentage points. This most recent aggressive trade policy has added to uncertainty in financial markets across the globe.
Undoubtedly tariffs is one of the big issues in play at the moment. Markets are buzzing in anticipation of the big employment numbers the U.S. will put out later this week. These jobs statistics will shed more light on the state of America’s economic recovery and may help shape market forecasts going forward. While investors wait for these important data points to materialize, the gold market will likely continue to react sharply to rising geopolitical tensions and unfriendly economic indicators.
Earlier in the day, President Trump offered an interview to NBC, where he expressed strong disapproval of Russian President Vladimir Putin. His comments, made during a period of high international tensions, may have more far-reaching repercussions for global markets. Yet the ongoing interaction between geopolitical developments and macroeconomic policy still proves key to guiding investor sentiment and propelling market forces.