Given the major change in market dynamics, gold prices are set up to rocket. Renewed tariff threats from the US and the world geopolitical climate in general are accelerating this shift. The well-defined 21-day Simple Moving Average (SMA) and triangle support at $2,958 are still tough hurdles to overcome for sellers. Meanwhile, the US Dollar's recent loss of recovery momentum, fueled by President Donald Trump's tariff threats, supports the upward trajectory of gold prices. These changes occur amid growing speculation in advance of Trump’s $50 billion announcement on reciprocal tariffs.
Trump clarified his position on future tariffs, stating:
"all we're going to do is reciprocal,"
With some noteworthy exceptions likely on the April 2 tariffs. Together, these conditions have prompted the announcement of a storm of confusion in the marketplace. Reactions to these impacts, real and potential, are driving markets all around the globe.
Market Indicators and Technical Analysis
The technical setup for gold is as bullish as it has been in years. The 14-day RSI is at 66 indicating strong bullish momentum. The daily chart above indicates that traders are targeting $3,080 next, according to an ascending triangle pattern. Bullish sentiment continues to climb! The gauge measuring growth in China’s manufacturing and services sectors surged 53.5 for March, bouncing back from a reading of 51.6 in February.
Should sellers prove effective at pushing prices lower, they’ll get to the next significant support area. This level was determined by the low from last week of $2,982. After a tough start to the year, analysts say gold is poised to test its former all-time high of $3,058. They’re so confident that it will break that mark.
Global Geopolitical Developments
Geopolitical factors have been a primary driver for the current market situation. Now, Ukrainian President Volodymyr Zelensky has his eyes set on pitching to US Prez Trump. He will try to get weapons and seek sanctions on Russia if Moscow violates any agreement reached. These acts make the current situation even more complicated with markets responding to projections of changes or disruptions in global relations.
The US has had great success negotiating agreements with Ukraine and Russia. These agreements will serve as a short-term restraint on maritime attacks and a moratorium on energy target attacks. This agreement includes Washington's commitment to advocating for the lifting of certain sanctions against Moscow, which could further influence market conditions.
Upcoming Tariffs and Economic Indicators
According to the Toronto Star, President Trump is already getting ready to slap three stages of escalating tariffs on—one stage for each Canadian province. Additionally, Canada will likely experience lesser effects from these tariffs that go into effect on April 2. While these announcements are still being dissected, the immediate ramifications on the markets will be profound as they await clearer guidance.
Major economic indicators are due later this week. The Core PCE, the Federal Reserve’s preferred measure of inflation, is likely to provide crucial information about the economy’s state and shape future monetary policy.