Is $3,500 Gold Price Next After Record Week in XAU and China Rare Earth Halt?
The price surged last week despite rallying treasury yields, and it might reach $3,500 this week as China halts rare earth exports.
A Sharp Pullback, Then the Biggest Three-Day Rally Ever
However, the gold market experienced a sharp correction earlier this month. After peaking above $3,200, XAU/USD plunged by over $200, falling below the $3,000 level. The catalyst? A sweeping package of new tariffs introduced midweek sparked a global market sell-off, forcing investors to liquidate gold holdings to meet margin calls elsewhere.
Despite the steep drop, gold found technical support near its 50-week simple moving average, helping to stabilize prices. What followed was extraordinary—a $260 rally in just three days, marking the largest three-day gain in gold’s history. The recovery was fueled by renewed fears surrounding US-China trade relations and a flight to safety.
Dollar Weakness Boosts Gold’s Appeal
Further supporting the gold rally was significant weakness in the US dollar. The US Dollar Index (DXY) fell sharply from 103 to a low near 99 before closing the week around 100—a nearly three-year low. Historically, a weaker dollar increases gold’s appeal, especially to foreign buyers, as it becomes cheaper in other currencies. This correlation remained intact, offering gold another tailwind.
China’s Rare Earth Export Halt Adds to Bullish Case
In a dramatic geopolitical turn, China halted shipments of seven rare earth elements, including gold, starting April 4. According to sources cited by Reuters, this move came in retaliation to the US’s latest tariff hikes and involves placing the materials under a new licensing regime. By tightening export controls, Beijing is effectively reducing global supply—potentially lifting gold prices further.
Gold Chart Daily – Rebounding $250 Off the 50 SMA
The supply squeeze, combined with resilient demand, sets the stage for gold to push higher. With gold already reclaiming roughly $250 in gains in just three days, the metal is now just a similar move away from the $3,500 mark.
Bond Market Signals Don’t Deter Gold’s Momentum
Interestingly, the usual headwinds from bond markets have failed to slow gold’s ascent. Last week, US Treasury yields soared, with the 10-year jumping from 3.88% to 4.60%, driven by heavy selling. Real yields also dipped to 2.307%, reflecting investor expectations of future inflation-adjusted returns. Despite this, gold’s rally remained intact, suggesting overwhelming demand for safe assets is outweighing traditional market mechanics.
Outlook: Is $3,500 Within Reach?
Given last week’s explosive price action and the current macroeconomic backdrop, a move toward $3,500 per ounce is no longer far-fetched. Continued trade tensions, economic uncertainty, and tightening supply conditions are all aligning in gold’s favor.
While short-term volatility is always a factor, the long-term trend for precious metals remains decisively upward. If current momentum holds, gold could very well break new ground in the coming days.
Bottom Line:
With investors increasingly turning to gold as a hedge against a volatile global landscape, and with additional support from currency weakness and supply restrictions, $3,500 is a realistic near-term target—not just a speculative headline.
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