Gold on the Move: Can XAU Hit $2,900 as Trade War Heats Up?

Gold prices are holding firm near record levels as investors seek refuge in the safe-haven asset following renewed concerns over global trade tensions.

XAU/USD is currently trading at $2,875, up 0.14%, as U.S. President Donald Trump’s latest tariff announcements shake market sentiment.

During the weekend, Trump revealed plans for new 25% tariffs on all steel and aluminum imports, escalating an already tense trade policy. He also hinted at imposing reciprocal tariffs on several countries in the coming days, fueling investor uncertainty. The geopolitical landscape remains volatile, with ongoing discussions over U.S.-Russia relations and the Ukraine conflict adding further complexity.

With markets closely watching Federal Reserve policy shifts and global economic reactions, analysts forecast gold could test $2,900 to $2,910 in the near term.

Trade Tensions Boost Gold’s Safe-Haven Appeal

Gold has historically served as a hedge against economic instability, and Trump’s latest tariff policies have once again heightened demand for the precious metal. Investors are shifting capital into gold as concerns grow over the impact of increased trade barriers on global markets.

Kelvin Wong, OANDA’s senior market analyst for Asia-Pacific, noted, “Global trade tension is still pretty much at play and could drive gold prices to $2,900 to $2,910 in the near term. I don’t see a high probability of a correction yet, unless we see a very strong U.S. dollar push up.”

However, rising U.S. interest rates remain a potential headwind for gold, as higher yields typically reduce demand for non-yielding assets. Despite this, the Federal Reserve’s cautious stance on rate cuts, citing a strong labor market and persistent inflation, suggests that gold may continue to benefit from investor uncertainty.

Technical Outlook: Can Gold Break Above $2,900?

Gold (XAU/USD) remains bullish, trading within a well-defined ascending channel on the 4-hour chart. The 50-day EMA at $2,827 acts as a critical support level, reinforcing the broader uptrend.

• Key Support Levels: Immediate support stands at $2,852, with further downside protection at $2,834 and $2,820. A breakdown below these levels could trigger a correction.

• Resistance Levels: Gold faces near-term resistance at $2,882, followed by $2,897 and $2,912. A sustained break above $2,912 could pave the way for a rally toward $2,930 and beyond.

For now, traders are closely monitoring price action around the $2,852 support level. If buyers maintain control, gold could see another push toward fresh highs.