Gold has recently regained momentum as investors seek safety amid rising trade tensions and growing uncertainty around central bank policy. With markets on edge ahead of the Federal Reserve’s next move, gold is drawing renewed attention as a hedge against volatility and shifting interest rate expectations.
Gold prices surged to their highest level in two weeks on Tuesday, driven by renewed concerns over potential US trade tariffs and anticipation surrounding the Federal Reserve’s upcoming policy announcement.
Spot gold rose by 1.4% to USD 3,380.92 per ounce during early Asian trading hours, while US gold futures advanced 2% to USD 3,389.90.
The market reacted to an unexpected announcement from former President Donald Trump, who proposed a 100% tariff on foreign-produced films, sparking volatility across financial markets.
Attention is now focused on the Fed’s interest rate decision, scheduled for Wednesday.
While the central bank is widely expected to maintain rates in the 4.25%–4.50% range, market participants will scrutinise the forward guidance for clues.
A dovish stance from Chair Jerome Powell could boost demand for precious metals.
Analysts at Goldman Sachs predict three 25-basis-point rate cuts this year, beginning as early as July.
Gold typically benefits from a lower interest rate environment, which reduces the opportunity cost of holding non-yielding assets like bullion.
Amid heightened geopolitical tensions and policy uncertainty, gold has reasserted its status as a safe-haven asset. Precious metals follow gold higher.
The rally in gold also lifted other precious metals. Spot silver climbed 1.5% to USD 32.99 per ounce, platinum gained 1.3% to USD 971.24, and palladium inched up 0.5% to USD 945.75.
Gold experienced a powerful rally, jumping from a base of USD 3,222.72 to a high of USD 3,386.99—an impressive gain of over 160 points.
The surge accelerated after consolidating above the 30-period moving average, with momentum increasing sharply after breaching key levels at USD 3,310 and USD 3,350.
All key moving averages (5, 10, and 30-period) are aligned in bullish formation.
The MACD (12,26,9) shows a strong upward trajectory, with a clear bullish crossover and expanding histogram bars—indicating robust buying pressure.
However, a rejection candle near resistance at USD 3,387 suggests some profit-taking at elevated levels.
Immediate support is seen in the USD 3,310–3,325 zone. If bulls maintain price action above the 30-period MA, the uptrend remains intact.
Should the Fed hint at a more dovish policy path and trade tensions continue to escalate, gold could attempt to break through the psychological resistance level at USD 3,400.
Such a scenario would likely reinforce gold’s appeal as a safe-haven asset, especially in an environment of weakening economic indicators and geopolitical friction.
Traders should closely monitor Jerome Powell’s post-meeting comments, as well as upcoming labour market data, for signals on the central bank’s future stance.
As long as uncertainty around interest rates and global trade persists, the overall risk bias for gold remains skewed to the upside, with strong technical support helping to sustain bullish momentum.
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