๐ Gold breaks above $2,900 on trade war fears and inflation concerns
The gold (XAU) price surged by 1.64% on Monday, breaking through the key $2,900 level as safe-haven demand increased after U.S. President Donald Trump introduced new tariffs.
๐ Possible effects for traders
The gold (XAU) price surged by 1.64% on Monday, breaking through the key $2,900 level as safe-haven demand increased after U.S. President Donald Trump introduced new tariffs.
Trump imposed an additional 25% tariff on all steel and aluminium imports. He also said he would announce reciprocal tariffs on several countries later this week, further fuelling fears of a global trade war. Investors worry that tariffs may exacerbate U.S. inflation and increase geopolitical tensions worldwide. As a result, gold, considered a hedge against inflation and political instability, has been rising almost uninterruptedly for the past two months. 'Obviously, the tariff war is behind the rise; it just reflects more uncertainty and more tension in the global trade situation', said Marex analyst Edward Meir.
According to Reuters, bullion has already hit its seventh record high this year, driven by Trump's tariff threats. These threats have fuelled uncertainty over global growth, trade wars, and high inflation, prompting investors to turn to gold as a safe-haven asset. Phillip Streible, chief market strategist at Blue Line Futures, said gold's 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast towards around $3,250 or $3,500.
Earlier today, XAUUSD continued to rise during the Asian session but lost some gains during the early European trading hours. 'Spot gold may extend gains into $2,950 to $2,962 per ounce before reversing its uptrend', said Reuters analyst Wang Tao. Today and tomorrow, Fed Chairman Jerome Powell will testify before Congress. Traders should monitor his remarks for future guidance on U.S. monetary policy changes. The testimony will commence at 3:00 p.m. UTC. Also, investors should pay attention to U.S. reports this week: the Consumer Price Index (CPI) and the Producer Price Index (PPI). The data may influence the Federal Reserve's (Fed) monetary policy, impacting the U.S. dollar and gold prices.
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The gold (XAU) price surged by 1.64% on Monday, breaking through the key $2,900 level as safe-haven demand increased after U.S. President Donald Trump introduced new tariffs.
๐ Possible effects for traders
The gold (XAU) price surged by 1.64% on Monday, breaking through the key $2,900 level as safe-haven demand increased after U.S. President Donald Trump introduced new tariffs.
Trump imposed an additional 25% tariff on all steel and aluminium imports. He also said he would announce reciprocal tariffs on several countries later this week, further fuelling fears of a global trade war. Investors worry that tariffs may exacerbate U.S. inflation and increase geopolitical tensions worldwide. As a result, gold, considered a hedge against inflation and political instability, has been rising almost uninterruptedly for the past two months. 'Obviously, the tariff war is behind the rise; it just reflects more uncertainty and more tension in the global trade situation', said Marex analyst Edward Meir.
According to Reuters, bullion has already hit its seventh record high this year, driven by Trump's tariff threats. These threats have fuelled uncertainty over global growth, trade wars, and high inflation, prompting investors to turn to gold as a safe-haven asset. Phillip Streible, chief market strategist at Blue Line Futures, said gold's 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast towards around $3,250 or $3,500.
Earlier today, XAUUSD continued to rise during the Asian session but lost some gains during the early European trading hours. 'Spot gold may extend gains into $2,950 to $2,962 per ounce before reversing its uptrend', said Reuters analyst Wang Tao. Today and tomorrow, Fed Chairman Jerome Powell will testify before Congress. Traders should monitor his remarks for future guidance on U.S. monetary policy changes. The testimony will commence at 3:00 p.m. UTC. Also, investors should pay attention to U.S. reports this week: the Consumer Price Index (CPI) and the Producer Price Index (PPI). The data may influence the Federal Reserve's (Fed) monetary policy, impacting the U.S. dollar and gold prices.
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