Gold prices began to retreat on Monday after hitting a record high earlier. This decline came amid a slight improvement in investor risk appetite. The US announcement of partial tariff waivers on Chinese imports helped boost markets.
However, overall sentiment remained strained due to ongoing global trade tensions. Despite the decline, gold held above $3,200 per ounce. A weaker dollar and Treasury yields supported prices relatively well.
Comments from the Federal Reserve regarding monetary easing also added further momentum. Spot gold prices fell 0.3% to $3,225.79 per ounce. June gold futures fell 0.1% to $3,240.87 per ounce. Gold remained close to last week’s all-time high of $3,245.69 per ounce. Asian Markets React to Tariff Easing
Asian markets posted significant gains, coinciding with a decline in gold. US stock indices rose in Asian trading, supported by the tariff news. The White House announced that some electronic goods would be exempt from higher tariffs. This decision provided temporary relief to major US companies like Apple. However, President Trump indicated his intention to impose new tariffs on electronic imports soon. He stated that the tax rate on these products would reach 20%.
Ongoing Tensions Between Washington and Beijing
Trump’s statements led to continued anxiety among investors. The recent escalation between the United States and China contributed to increased caution.
China responded to the US measures by imposing retaliatory tariffs of 125%. Beijing has shown no intention of backing down from its tariff decisions. It has also begun reaching out to other trading partners to strengthen its bilateral relations. Traders fear that the trade war could lead to a global recession and disruption to supply chains. Some analysts estimate the probability of a US recession this year at 50%.
Weak Dollar Provides Limited Support
Despite the tensions, metals markets benefited from the weaker dollar. Platinum futures rose 0.8% to $951.90 per ounce, while silver futures fell 0.3% to $31.827 per ounce. Copper futures on the London Metal Exchange were steady at $9,152.90 per ton.
New Gold Price Forecasts from Goldman Sachs
Goldman Sachs Group Inc. raised its 2025 gold price target to $3,700 per ounce. The previous target was $3,300. This is the third revision this year. The bank noted increased demand for gold as a safe haven amid the trade war. It explained that if the conflict escalates, the price could reach $4,500 per ounce by the end of 2025. The bank emphasized that gold represents a hedge against the risk of a US economic recession. It also noted the increasing reliance of investors on gold during times of economic and political volatility. Gold Continues to Gain Focus After Historic Jump Amid Trade Uncertainty
Gold (XAUUSD) remains the focus of investor attention after hitting record highs last week.
This surge was driven by capital flows into safe-haven assets due to global trade uncertainty. Ongoing concerns about tariffs contributed to boosting demand for gold. Conversely, the dollar and Treasuries came under significant pressure amid declining confidence in the US economy. Until Sunday evening, gold prices experienced some volatility.
The metal rose 6% last week and is now trading 23% higher since the beginning of 2025. The primary reason for the volatility was the market’s absorption of news of the recent US tariff exemptions. The exemptions included goods such as smartphones, computers, and semiconductors. However, the President later confirmed that these exemptions were temporary and announced a national investigation into the chip sector. The investigation was carried out under the pretext of protecting national security, which has brought concerns back to the forefront.
Technical Breakout Boosts Gold’s Uptrend
Gold prices had earlier witnessed a slight decline towards the 50-day moving average. It also touched the lower support line of ascending channel before rebounding on Friday. Gold managed to break the previous technical pattern, reinforcing expectations of continued upward momentum. However, technical analysis indicates the emergence of negative divergence between the price and the Relative Strength Index (RSI).
Upward Price Targets and Identifying Support Levels
Technical analysis helps predict potential price targets and identify critical support points. The “measured move” principle is used to estimate the next upward target based on the shape of the channel. Accordingly, distance between the two trend lines in the channel is calculated and added to the breakout point.
For example, adding $200 to the $3,180 level reveals a target at $3,380.
This target represents an increase of approximately 4% compared to gold’s current trading level.
Conversely, traders should monitor key support levels for corrective movements. These levels include the 50-day moving average and the lower trend line of the channel. These points represent opportunities to re-enter or evaluate the current strategy.
Gold’s Hostage
The problem for gold is that it is, like any other asset, a hostage to Trump’s erratic and inconsistent trade and economic policies. If Trump continues his trade war with China and increases tariffs from 10% on other countries after a 90-day pause, gold is likely to continue rising. However, if a compromise is reached with Beijing that allows both sides to save face, and other countries reach agreements with Trump that largely preserve global trade, dilemma here is that determining the likely trajectory of Trump’s tariff war is, at best, a guessing game. Perhaps the safest assumption is that when the dust settles, the United States is likely to continue imposing the highest average import tariffs since the 1930s.
China Premium
Or will the fear trade subside and gold’s traditional drivers of central bank buying and physical demand in China and India return to play?
The move away from US Treasuries is likely to drive gold buying, especially in China, the world’s largest buyer of gold. Chinese consumer demand may also hold up amid uncertainty about the outlook for equities, and this dynamic is reflected in the rising premium to spot purchases, which rose to $39 per ounce on April 11, the highest level since December 2016, and up from the $16 discount the week after Trump’s November election victory.
However, unlike China, higher gold prices are likely to dampen consumer demand in India, the second-largest buyer of the precious metal. Some signs of consumer stress have already emerged in India, with the discount on gold purchases falling to an eight-and-a-half-year low of $41 per ounce on March 21.
