The Impact of the US-China Trade War on Gold Prices: What Investors Need to Know

As the trade war between the United States and China continues to escalate, investors are left wondering about the implications for global markets, especially gold prices. The tariffs, economic uncertainty, and shifts in global trade policies have created a volatile environment, making gold a critical investment vehicle during this period.

After analyzing the movements of gold futures in the daily chart, it is anticipated that there could be more exhaustion in the market. President Trump’s aggressive stance to keep interest rates high to strengthen the dollar might cap the upside potential for gold futures, despite recent highs.

Following President Trump’s move to impose 10% trade tariffs against China, Beijing retaliated with its own measures, signaling the start of a renewed trade war between the world’s biggest economies. This escalation has investors bracing for further impact on global markets, with potential implications for inflation and economic growth.

With the Federal Reserve likely reconsidering interest rate cuts due to tariff-linked inflation, the uncertainty surrounding Trump’s economic policies could put bearish pressure on gold prices. Any future interest rate hikes could further diminish the appeal of gold as a safe-haven asset.

Traders should be prepared for extreme volatility in gold futures, presenting both opportunities and risks. Immediate resistance levels are at $2894 and $2929, while support levels are at $2807, $2758, and $2695. A breakdown below $2537 could trigger a fresh selling spree.

It is important for readers to closely monitor the developments in the US-China trade war and the Fed’s actions in the coming weeks. This analysis is based on observations and readers are advised to exercise caution before making any investment decisions.