- Gold hits new 2025 highs amid growing investor anxiety over Trump’s trade rhetoric.
- Despite a rise in the US Dollar Index, gold’s rise signals strong safe haven demand.
- Geopolitical tensions in the Middle East are intensifying, along with possible US economic measures against Russia.
The price of gold advances more than 0.39% at the end of the North American session, with the precious metal rising decisively above the psychological figure of $2,650 with buyers setting their target at the all-time high of $2,790. At the time of writing, XAU/USD is trading at $2,755 after bouncing from daily lows of $2,741.
The underperforming metal extended its gains as United States (US) President Donald Trump’s trade rhetoric expanded from Mexico, Canada and China to the Eurozone. Consequently, as traders become uncertain about the outcome of the “trade war”, they bought bullion which has risen to its highest level during 2025, at $2,763.
The US Dollar Index (DXY), which measures the performance of the Dollar against a basket of six peers and which is generally inversely correlated with gold, rose 0.08% to 108.16.
A thin economic agenda in the United States keeps traders adrift of geopolitical developments, with Trump grabbing the headlines.
In his Truth account, President Trump said that he does not seek to harm Russia, called on President Vladimir Putin to end the war soon and warned that if he does not do so, he would have to impose taxes, tariffs and sanctions on Russian goods imported into the United States. US
The 10-year US Treasury bond yield rose marginally during the day, capping bullion price gains.
In the Middle East, the ceasefire agreement between Israel and Hamas was set aside when Israel launched a drone attack in the Hasbaya area of ​​southern Lebanon, according to Lebanese press cited by Israeli journalist Kai.
This week, the US economic docket will include initial jobless claims data, preliminary S&P Global PMIs and housing data.
Daily Market Summary: Gold Price Soars Amid High US Yields
- The price of gold rises as real yields rise by one basis point. Measured by the yield on 10-year Treasury Inflation Protected Securities (TIPS) it stands at 2.18%.
- President Trump confirmed that universal tariffs on all imports to the US are also under consideration and will come at a later stage, Reuters reports.
- “(Trump) has perhaps been a little less aggressive on tariffs than feared, which helps — fewer/lower tariffs are taken as indicative of lower inflation and therefore potential for more rate cuts,” Tai Wong said. , an independent metals trader cited by Reuters.
- Market participants are pricing in roughly equal odds that the Fed will cut rates twice by the end of 2025, with the first reduction occurring in June.
XAU/USD Technical Outlook: Gold Price Breaks Above $2,750, Bulls Target All-Time High
Gold prices are set to challenge the all-time high of $2,790 amid continued uncertainty over US trade policies. The daily chart suggests that XAU/USD could touch the $2,800 level sooner rather than later. A decisive breakout of the latter would expose the psychological price levels of $2,850 and $2,900.
On the downside, if the bears drag bullion prices below the $2,750 figure, the 50-day and 100-day SMA emerge as support levels, each at $2,648 and $2,647. If they are broken, the 200-day SMA at $2,515 is next.
Gold FAQs
Gold has played a fundamental role in human history, as it has been widely used as a store of value and medium of exchange. Today, apart from its brilliance and use for jewelry, the precious metal is considered a safe haven asset, meaning it is considered a good investment in turbulent times. Gold is also considered a hedge against inflation and currency depreciation, since it does not depend on any specific issuer or government.
Central banks are the largest holders of Gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and purchase Gold to improve the perception of strength of the economy and currency. High Gold reserves can be a source of confidence for the solvency of a country. Central banks added 1,136 tons of gold worth about $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the largest annual purchase since records exist. Central banks in emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are the main reserve and safe haven assets. When the Dollar depreciates, the price of Gold tends to rise, allowing investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken the price of Gold, while sell-offs in riskier markets tend to favor the precious metal.
The price of Gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of Gold to rise rapidly due to its status as a safe haven asset. As a non-yielding asset, the price of Gold tends to rise when interest rates fall, while rising money prices tend to weigh down the yellow metal. Still, most of the moves depend on how the US Dollar (USD) performs, as the asset is traded in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold in check, while a weaker Dollar is likely to push up Gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
