- Gold reaches a new historical maximum in the midst of speculation that Trump tariffs on April 2 could affect all commercial partners.
- Goldman raises the chances of recession in the US to 35% as the feeling deteriorates and Washington points to tolerance towards deceleration.
- DXY and yields rise, but fail to affect the gold rally while safe refuge flows dominate before the US key data.
Gold records another record on Monday, exceeding the threshold of $ 3,100 for the first time and extending its profits to a historical maximum of 3,127 $ before going back a bit. The uncertainty about US business policies and the day of April 2 persists, with investors adopting an avevers risk posture and going to the attractiveness of safe yellow metal shelter. At the time of writing, the XAU/USD is quoted at $ 3,119, rising more than 1%.
The appetite for risk deteriorates as operators expect the announcement of additional tariffs on Wednesday. Goldman Sachs revealed that the probabilities of a recession in the United States (USA) increased from 20% to 35%, mainly due to the pessimism of companies and homes on perspectives, as well as to Washington’s tolerance towards a deeper economic deceleration.
Trump’s comments on Sunday at the Air Force One increased the possibilities that tariffs could be universal, instead of the 10 or 15 revealed by US Treasury Secretary, Scott Besent. “Who told you 10 or 15? You may hear it, but you didn’t hear it from me,” said the president. “You would start with all countries. So let’s see what happens.”
Therefore, gold prices exploded, despite the fact that the yields of the US Treasury bonds had recovered some land, particularly the 10 -year bonus coupon. The US dollar index (DXY), which tracks the value of the dollar against a basket of six currencies, rises 0.24% to 104.25.
In the data front, the Chicago PMI improved, despite remaining in contraction territory during the sixteenth consecutive month. This week, the US economic agenda will include the ISM manufacturing and services PMI, as well as non -agricultural payroll figures.
What moves the market today: gold prices rise in the midst of firm yields of US Treasury Bonds.
- The 10 -year bonus of US bonus is maintained plane at 4,257%. The real US yet yields fall two basic points to 1.86%, according to the yields of the US Treasury values protected against inflation (Tips) at 10 years.
- Chicago PMI data for March rose 47.6 points from 45.5 and exceeded 45.2 forecasts. Notably, it is the highest level since November 2023, although it is still in contraction territory during the sixteenth consecutive month.
- Some of the subcomponents improved, such as production, new orders, employment and pending orders. The delivery of suppliers, inventories and paid prices decreased, according to the survey.
- The US inflation data last week remained stable, according to the US Economic Analysis Office, however, the risks of a recession led market participants to provide for more than 74 basic points of relaxation towards the end of 2025, according to data from the Chicago Commerce Board.
- In the geopolitical field, the president of the USA, Donald Trump, threatened to impose secondary tariffs of 25% -50% on Russian oil buyers, if Moscow blocks their efforts to end the war in Ukraine.
- Wall Street banks updated their gold forecasts last week. Goldman Sachs economists, Société Générale and Bank of America identified $ 3,300 as the next objective, according to a kitco article.
Technical perspective of the Xau/USD: The price of gold is recovered beyond $ 3,050, with a view at $ 3,100
The gold rally expands. The yellow metal has risen 18.96% so far this year, and due to uncertainty in financial markets, the upward trend could continue. Although the Relative Force Index (RSI) is in envelope, operators must be aware that, due to the aggressiveness of the movement, the most extreme level is 80.
The next XAU/USD resistance would be the psychological figure of $ 3,150 and $ 3,200. On the other hand, the first gold support would be $ 3,100. A rupture of the latter will present the maximum of March 20 converted into a support in 3,057 $, followed by the $ 3,000 figure.
FAQS GOLD
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor 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 condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts 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.
