Gold Corrects from Record Highs as Trump’s Tariffs Shake Global Markets

The announcement of a 10% base tariff and a 54% tariff on Chinese goods has triggered strong reactions across global markets. Gold (XAU) prices surged to $3,167 as investors sought safe-haven assets amid rising fears of a global economic slowdown. However, the rally was short-lived, and the price returned back to $3,054. This move was aligned with the global equity selloff and reflects panic over the scale of Trump’s new tariff plan. Asian gold producers rallied, and the precious metal defied broader market losses due to increasing demand in uncertain conditions.

Moreover, the US Dollar Index fell sharply after breaking below 103.50. The bearish trend intensified following Trump’s announcement as investors priced in the likelihood of slowing growth and potential Fed rate cuts. Markets reacted to the 54% tariff on Chinese goods as a sign of escalating trade tensions, undermining confidence in the US dollar and increasing downward pressure.

US Treasury yields dropped significantly and broke below the support level of 4.10%. US Treasury yields target lower levels as bonds attract safe-haven flows amid equity weakness and trade uncertainty. Fears of reciprocal tariffs, which will likely slow global demand, drive this downward trend. Treasury Secretary Scott Bessent stated that the U.S. could lift tariffs if countries return production domestically. However, markets remain cautious as the economic implications of these aggressive trade moves continue to unfold.

Gold (XAU) Technical Analysis

Gold Daily Chart – Resistance

The daily chart for gold shows that the price has broken out of the ascending channel and reached a new record high at $3,167. After hitting this level, the price corrected back to $3,054 due to strong overbought conditions and concerns over tariffs mentioned by Trump. The correction from the record high, followed by support at $3,054, has triggered a new wave of volatility in the market. This suggests that a break above $3,167 would be strongly bullish.

Gold 4-Hour Chart – Ascending Channel

The 4-hour chart for gold shows the formation of an ascending channel. Currently, the price trades within this channel, with resistance between $3,150 and $3,170. Notably, Thursday’s high at $3,167 was within this resistance zone. Following that, the recent correction found support at the mid-level of the channel, and as a result, a rebound is currently in progress.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Breakout

The daily chart for U.S. Treasury yields shows that the price has broken the key level of 4.10%, initiating a downward trend. Furthermore, the chart indicates that the failure to break above the 4.62% to 4.70% resistance zone, followed by a drop below 4.10%, has consequently triggered the current decline in yields.

10-Year Treasury Note Yield 4-Hour Chart – Breakout

The 4-hour chart for U.S. Treasury yields shows that yields have broken below 4.10% after consolidating between 4.45% and 4.10%. As a result, this break has opened the door for a potential move toward 3.70%.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows that it has broken below 103.50 and initiated a quick drop toward the support level of 100.65. This decline is driven by strong bearish pressure that began after a technical break below the 107 level. The pressure is largely due to economic uncertainties caused by Trump’s trade policies.

US Dollar 4-Hour Chart – Bearish Pressure

Bearish pressure is also evident on the 4-hour chart, which shows the formation of a descending channel. The index has reached oversold levels, suggesting a potential rebound. However, if the index remains below 103.50, the immediate-term target remains 100.65 or lower.