Gold Falls to 3-Week Low as Market Sell-Off Accelerates—What’s Next for XAU/USD?
Gold took a heavy hit on Monday, plunging to its lowest level in more than three weeks as panic swept across global markets.
Gold took a heavy hit on Monday, plunging to its lowest level in more than three weeks as panic swept across global markets.
The precious metal, typically a safe haven in times of turmoil, dropped as investors rushed to raise cash and cover losses in other collapsing assets.
The sell-off comes in the wake of former President Donald Trump’s sweeping new tariffs, which triggered a chain reaction in global markets. On Friday alone, gold prices slid more than 3%—part of a broader unwinding that saw stocks nosedive and recession fears spike across the board.
Tariffs Trigger Panic—and Selling Across the Board
Friday’s dramatic market moves were fueled by Trump’s surprise announcement of higher tariffs across the board. China quickly responded with its own retaliatory measures, including 34% tariffs on U.S. goods and new export restrictions on rare earth metals—fanning fears of a drawn-out global trade war.
The reaction was swift and severe: nearly $6 trillion was wiped off U.S. equities last week, while Japan’s Nikkei 225 plunged nearly 9% during early trading on Monday.
Even gold wasn’t spared.
With traders scrambling to cover margin calls, some offloaded bullion holdings to raise cash. While gold often benefits during economic uncertainty, in this case, it was part of the broader liquidation wave.
Federal Reserve Chair Jerome Powell added fuel to the fire, warning that tariffs could boost inflation while slowing growth—a tricky combo for policymakers trying to balance stability and stimulus.
Gold Technical Outlook (XAU/USD) – April 7, 2025
At last check, gold (XAU/USD) is trading around $3,039, recovering slightly from an earlier low of $3,008. That low marked a breakdown below the ascending channel support—a level that had held firm for weeks.
On the 4-hour chart, gold is attempting to regain footing, but faces a tough road ahead. Resistance is stacked at $3,057 and the 50-period EMA at $3,075. Unless bulls manage to reclaim these levels soon, downside risks will persist.
The Relative Strength Index (RSI) sits at 42, showing mild bearish momentum but not yet oversold—leaving the door open for more weakness if momentum doesn’t shift.
Key Technical Levels
Immediate Support: $3,008, then $2,971
Immediate Resistance: $3,057, then $3,075 (50-EMA)
Upside Targets: $3,100 and $3,136
RSI (14): 42 – Bearish-neutral zone
Final Thoughts: Cautious Optimism, but Volatility Rules
Gold’s recent drop doesn’t necessarily mean the safe-haven trade is over—but it does suggest that markets are in triage mode. With investors liquidating everything to manage risk, even traditionally “safe” assets like gold are feeling the heat.
Still, if the macro picture continues to deteriorate and central banks pivot to more dovish policies, gold could find its footing again. For now, traders should watch for a decisive move above $3,075 to regain bullish traction. Until then, caution remains the name of the game.
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