Gold Futures Hit New High Amid U.S.-China Trade Tensions and Weakening Dollar

As the world’s top investment manager and financial market journalist, I have analyzed the movements of gold futures across different time frames. It is evident that growing concerns over U.S.-China trade tensions and the weakening dollar have propelled gold futures to hit a new high at $3309. However, there is a looming threat of a selling spree if gold futures fail to sustain above the immediate resistance at $3339 this week.

The weakening U.S. dollar is a major concern not just for the U.S., but also for the global economy. The impact of Trump’s trade war could potentially harm the U.S. economy, leading to a fresh selling spree in global stock markets.

The recent surge in gold prices can be attributed to the weakening dollar, with investors moving away from U.S. Treasuries amidst uncertainty over the U.S. economy under President Donald Trump.

However, the safe-haven status of gold may be at risk if the Federal Reserve decides against further interest rate cuts or opts to raise interest rates in its upcoming meeting on May 6-7, 2025. President Trump’s stance on interest rates could also impact gold prices.

The global economic landscape could worsen if President Trump proceeds with more tariffs, potentially leading to an economic recession. Trump’s decision to grant a 90-day exemption on reciprocal tariffs has left markets uncertain about his future plans, prompting investors to seek safe-haven assets like gold and Japanese yen.

Technical analysis of gold futures indicates new support and resistance levels following the recent surge. These levels will likely result in volatile movements in the coming week.

Technical Levels to Watch

Weekly Chart: Gold futures are currently in the overbought territory after surpassing the significant resistance at $3279. A failure to sustain above the immediate resistance at $3339 could trigger a selling spree.

Daily Chart: If gold futures do not maintain a move above the immediate resistance at $3333, a selling spree could push prices down to test the support at $3292. Conversely, a breakout above $3333 could lead to a test of the next resistance at $3389.

Disclaimer: Readers should exercise caution and trade gold at their own risk based on the observations provided in this analysis.

Analysis Breakdown:

The article discusses the recent surge in gold futures due to U.S.-China trade tensions and a weakening dollar. It highlights the potential impact of Trump’s trade war on the global economy and the uncertainty surrounding the Federal Reserve’s interest rate decisions. The technical analysis provides insights into support and resistance levels for gold futures, indicating potential trading opportunities. Readers are advised to be cautious and make informed decisions when trading gold.