Gold Hits Fresh Highs as Investors Seek Safe Haven Amid Market Uncertainty

Gold (XAU) prices hit a record high of $2,990, showing strong bullish momentum. This surge was driven by investors moving toward gold as a safe-haven asset amid growing economic uncertainty. Market expectations of Federal Reserve interest rate cuts and shifting US trade policies fuel gold’s upward trend. Traders have factored in a potential 74 basis points of rate reductions by year-end, adding to the bullish outlook for gold.

The recent tariff surge has also played a major role in gold’s price movement. This week, the US government implemented a 25% tariff on steel and aluminium to reduce the trade deficit. However, this strategy has sparked debate among officials. Treasury Secretary Scott Bessent reassured markets that a recession is not inevitable, while Commerce Secretary Howard Lutnick suggested it might be necessary to achieve policy goals. These mixed signals have led to market volatility. Despite the strong rally in the gold market, the US 10-year Treasury bond yield (TNX) and the US dollar index (DXY) consolidate above their respective support levels of 4.10% and 103.50.

Moreover, macroeconomic data has taken a backseat as tariffs dominate market sentiment. The chart below shows US Producer Price Index (PPI) data, which increased 3.2% year-over-year in February 2025, slightly down from 3.7% in January. Meanwhile, core PPI rose 3.4%, missing expectations of 3.5%.

Initial jobless claims for the week ending March 8 fell to 220K, beating projections of 225K and improving from the previous 222K. Meanwhile, the Atlanta Fed GDPNow model projects a 2.4% contraction in the first quarter of 2025, marking the first negative economic print since the COVID-19 crisis. With the Federal Reserve set to announce its next policy decision soon, traders are closely watching for updated economic projections and potential shifts in interest rates.

Gold (XAU) Technical Analysis

Gold Daily Chart – Price Surge after PPI Data Release

The daily chart for gold shows that the price has built positive momentum after days of consolidation. It has reached new record levels at $2,990. A break above $2,950 has opened the door for $3,000 and higher. The price will likely continue higher toward the ascending channel’s resistance, around $3,030. It may also move toward the resistance of the ascending broadening wedge around $3,200. The RSI has rebounded from the mid-level, indicating strengthening momentum. The price is poised to continue higher.

Gold 4-Hour Chart – Inverted Head and Shoulders

The 4-hour chart for gold shows that the price has broken the key level of $2,920 and initiated a strong upward move. The emergence of an inverted head and shoulders pattern indicates a potential move higher. However, the RSI shows overbought conditions as the price approaches the resistance line. A break above $3,000 is needed for further upside.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – 200-Day SMA Support

The daily chart for US Treasury yields shows that yields rebound from the support level of 4.10%, building positive momentum at this support. As yields remain above the 200-day moving average and the RSI rebounds from oversold levels, further upside is likely.

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

The support at 4.10% is also visible on the 4-hour chart, where yields are building positive momentum around this level. The RSI has rebounded from the oversold zone, indicating that the positive momentum will likely continue.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Support

The daily chart for the US Dollar Index shows that the index has rebounded from the strong support at 103.50. Following seven continuous days of decline, the two consecutive daily positive candles indicate that further consolidation is likely. However, the index will likely remain in a downtrend if the price stays below the 105.20 and 107 levels.

US Dollar 4-Hour Chart – Support Zone

The 4-hour chart for the US Dollar Index shows that the index is trading within a descending channel. Additionally, it has hit strong support at 103.50. Consequently, the index will likely consolidate if the price stays above the orange support zone on the 4-hour chart. However, a break below 103.50 would lower the index toward the 100.65 level.