According to Fitch Ratings, a reprieve in global growth forecasts taken within an astounding degree. They connect this trend most directly to the dramatic intensification in the current trade war. Analysts at the credit rating agency have lowered their world growth forecast for 2025 by 0.4 percentage points. Both China and the US will see an even larger cut, 0.5 percentage points lower than previously expected. Gold prices have hit record highs, driven by a surge in demand for safe-haven assets. This downward adjustment comes in the midst of persistent economic uncertainty.
The U.S.-China trade war is developing quickly. Consequently, the XAU/USD pair, which indicates the value of gold versus U.S. dollars, has reached record heights. On Wednesday afternoon, the eventual winners of this epic pairing surged to a staggering $3,333.10. This March milestone marks a new record and shows just how popular gold has become. Gold continues to rise, now approaching $3,330 per troy ounce. This increase is fueled by growing fears of increasing trade tensions and a depreciating U.S. dollar.
This spike in gold prices isn’t just a knee-jerk response to the trade war, an indication of more profound economic fears. Fitch’s new, increasingly pessimistic forecasts indicate that a global growth slowdown is likely underway. Such a potential economic slowdown usually drives investors towards gold, which serves as a hedge against economic uncertainty. Our favorite gold support levels are $3,317.20 (our magenta line on the chart above), $3,305.65 and $3,292.80. Resistance levels come in at $3,335.00, $3,350.00 and $3,375.00. These technical levels are very important as traders, investors and speculators judge the market reaction to continuing active news flow.
As for the bears, the 20 Simple Moving Average (SMA) was holding firm at $3,100. This area will provide strong mid-term support should gold encounter any corrections. The SMA is curving upward, with some strong bullish momentum. Even with the extreme overbought conditions decided by the RSI, which is stabilizing in the 80s, this momentum is still very much alive. The RSI that high shows the incredible demand for real estate in today’s market. It does indicate that we may be approaching a danger zone in which corrections become possible.
The 4-hour chart’s momentum indicator has rocketed far and away above its midline. This very robust number bolsters the already bullish sentiment for gold. Technical analysis indicates the need for caution due to overbought signals. Yet, there are no clear indications that XAU/USD will stop going up any time soon.
That trade war, especially the U.S.-China component, remains a major upward correction to growth forecasts. Consequently, investors are seeking safe havens such as gold, driving up demand. Investors are rightfully nervous about coming, higher tariffs and a chaotic U.S.-China trade disruption. To protect their portfolios from the uncertainty in equity markets, many are looking to gold now more than ever.