Gold edges higher as tariff hints further develop

• Gold extends bullish momentum after fresh comments from President Trump on incoming tariffs. 
• Nobody seems safe, with the focus on China and Europe. 
• Gold prints a fresh over two-month high and sets sail to the all-time high of $2,790.

Gold’s price (XAU/USD) extends its upside move and trades above $2,760 at the time of writing on Wednesday after booking over 1.20% gains the previous day. The bullish momentum is fueled by new US President Donald Trump’s comments on tariffs. This time, a 10% levy on Chinese goods triggered the leg higher in Bullion. 

Meanwhile, investors remain focused on the implications of the Trump administration’s tariff and tax cut policies, which would likely erode the nation’s finances and lead to an inflation boom. That may limit the Federal Reserve’s (Fed) ability to keep easing monetary policy. Higher borrowing costs typically pose a headwind for Bullion regarding the correlation between the two assets. 

Daily digest market movers: Tariff news keeps hitting

• Zimbabwe Gold exports rose to $1.44 billion last year from $1.22 billion in 2023, according to data from the Reserve Bank of Zimbabwe, Bloomberg reports. 
• Silver futures briefly spiked after Trump’s comments on tariffs for China, Mexico and Canada. Mexico is the top miner of Silver, and it is unclear whether the tariffs would apply to imports of the metal, Reuters reports.
• US Treasuries cannot catch a breath and are on the backfoot again, with the US 10-year benchmark trading at 4.56%, not far from its yearly low near 4.528% seen on Tuesday. 

Technical Analysis: Keep an eye on any inflation measure

All is well for Gold now, with the precious metal on a tear. However, that might quickly change once US inflation data comes in. Moreover, should inflation point to a resurgence in price pressures, expect to see Gold traders take their profit and run. So enjoy the rally, for now, as it could start to turn once inflation surges again. 

Profit-taking could emerge and push Gold’s price back to $2,700, with the downward-slopping trendline of the broken pennant chart pattern last week at  $2,668 as the next support. In case more downside occurs, the 55-day Simple Moving Average (SMA) and the 100-day SMA converging at around $2,649 is the next level to watch. 

Gold is now on its way to $2,790, which is still over 1% away from current levels. Once above that, a fresh all-time high will present itself. Meanwhile, some analysts and strategists have penciled in calls for $3,000, but $2,800 looks to be a good starting point as the next resistance on the upside. 

XAU/USD: Daily Chart