The Ultimate Guide to Investing in Gold: How Trump’s Tariff Policies are Impacting the Market
As the global financial markets continue to be swayed by uncertainty surrounding US President Donald Trump’s tariff policies, the price of gold has surged to an impressive $3,220 per troy ounce. This surge is driven by a variety of key factors that are shaping the movement of this precious metal.
Key Factors Driving Gold’s Movement
The stability of gold is intricately linked to the ongoing uncertainty surrounding Trump’s tariffs. While technology products were temporarily exempted from reciprocal duties, the administration is now contemplating similar exemptions for auto parts. However, tensions escalated on Monday when the White House initiated a national security probe into pharmaceutical and semiconductor imports, potentially leading to additional tariffs.
Furthermore, comments from Christopher Waller, a member of the Federal Reserve Board of Governors, have added to the bullish sentiment around gold. Waller suggested that interest rates could be cut in the near future if Trump’s tariffs persist. Market expectations are currently pricing in an 86-basis-point rate cut by the end of the year, although most investors anticipate the Fed to maintain rates in May.
Technical Analysis: XAU/USD
The market has experienced an upward wave, reaching a peak of 3,245 before correcting to 3,194. The current outlook suggests that consolidation is likely around 3,220. A downside breakout could trigger a correction towards 3,175, followed by a potential rebound towards 3,253. Conversely, an upside breakout may extend the rally to 3,253, after which a decline towards 3,105 is expected.
Technical indicators such as the MACD and Stochastic Oscillator support this analysis, with signals pointing towards potential price movements in the near term.
Conclusion
Gold continues to be supported by geopolitical and monetary policy uncertainties, with technical indicators signaling potential consolidation followed by further upside movement and a corrective pullback. Investors should closely monitor the market dynamics and be prepared for potential shifts in the coming days.
Remember, investing in gold carries risks and should be done with caution. Always consult with a financial advisor before making any investment decisions based on market analysis.