- Gold sees a small recovery at the start of the week despite tariffs being set to hit on Tuesday.
- Federal Reserve rate cut bets remain the second biggest driver for higher Gold prices.
- The precious metal holds near the daily Pivot Point for now.
Gold’s price (XAU/USD) is seeing some marginal gains on Monday after an initial surge higher during the Asian session. Tariffs are still set to hit on Tuesday for Mexico and Canada and additional tariffs on China, they are not really triggering another flight into Gold. Traders will need to look for new headlines about tariffs, and there is still the chance that United States (US) President Donald Trump will change his mind.
Meanwhile, traders are still digesting Friday’s turn of events. The spat between Ukraine President Volodymyr Zelenskyy on one side and US President Trump and Vice-President J.D. Vance is still making headlines. The surprise move that took place afterward in London, with the United Kingdom extending several billions in loans to be covered with the frozen Russian assets in Europe, was actually something that President Trump was after. With no rare earth deal in place, the televised spat in the Oval Office, and now London reeling in the agreement on the frozen Russian assets, all bets could be off the table with even possibly the US withdrawing from NATO.
Daily digest market movers: Gold bouncing around
- Ghana’s new central bank chief, Johnson Asiama, has suspended the West African nation’s program of paying for Oil with Gold and said he expects the Ghana cedi (GHC) to stabilize after its volatility of last year, Bloomberg reports..
- The CME Fedwatch tool shows a 77.6% chance of a lower monetary policy rate for the Federal Reserve (Fed) in June, while the odds of keeping it unchanged are 22.4%.
- At 18:00 GMT, Federal Reserve Bank of Richmond President Thomas Barkin delivers a speech, “Inflation Then and Now”, in Fayetteville Cumberland Economic Development.
- The US 10-year benchmark rate is currently trading around 4.23% on Monday, a touch higher from its fresh low at 4.19% on Friday.
Technical Analysis: As long as the pivot hold
It looks like the cat is out of the bag for now. Last week, traders received all the information they needed, and the first new tariffs under the second term from US President Trump are set to kick in on Tuesday. For Bullion to be enabled to make a fresh all-time high, or at least move in that direction, new tariffs will be needed. Besides that, a continuous descent in yields would also help, where both drivers would be enough to see a steep rally in Gold prices again.
The daily Pivot Point at $2,857 is currently providing support to bounce off from and attempt to push Bullion higher. Further up, the daily R1 resistance at $2,882 is the first big level to watch out for and converges with February 14 and 17 lows. In case Gold has enough oomph to break through there, the daily R2 resistance at $2,910 will possibly be the final cap on Monday.
On the downside, the S1 support at $2,835 converges with Friday’s low. That will be vital support for Monday. If Bullion bulls want to avoid another leg lower, that level must hold. Further down, the dailyS2 support at $2,805 should be able to catch any additional downside pressure and will try to avoid a break below $2,800 and $2,790.
XAU/USD: Daily Chart
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
Source: https://www.fxstreet.com/news/gold-holds-steady-amid-tariffs-fed-rate-cut-bets-talks-on-russia-ukraine-202503030903