Gold (XAU) and Silver (XAG) Surge Amid Escalating US-China Trade War

Donald Trump announced a tariff of 145% on Chinese imports, while China responded with a tariff of 125% on US goods. This escalation triggered sharp volatility across markets. The MOVE index surged to 140, reflecting stress in the bond market, as shown in the chart below. Long-term US Treasury yields rose steeply, showing concern over economic stability. At the same time, Trump temporarily suspended tariffs above 10% on all countries except China for 90 days, attempting to limit further global fallout.

This trade war environment favours gold (XAU) and silver (XAG). Investors seek safety as the US faces both inflation risks and slowing growth. The chart below shows the relationship between the US inflation rate and changes in US producer prices. It highlights that the US CPI has dropped to 2.4%, while the US PPI has eased to 2.7% year-on-year. Despite these declines, fears of stagflation persist. Gold has rallied sharply as a hedge in 2025. The recent rebound aligns with market uncertainty, a weaker dollar outlook, and doubts over future interest rate policy. Trump’s potential influence on the Federal Reserve raises expectations of rate cuts, possibly as early as the next FOMC meeting in May.

Money continues flowing into safe-haven assets. Gold benefits from this shift as equities face pressure from unknown policy directions. While stock markets briefly rebounded on Trump’s 90-day tariff relief, the longer-term outlook remains fragile. Rising import costs, ongoing trade tensions, and unpredictability create an ideal environment for strengthening gold and silver. As the economic standoff deepens, precious metals may see further upside as investors reduce risk exposure.

Gold (XAU) Technical Analysis

Gold Daily Chart – Price Surge

The daily chart for gold shows a strong bullish trend after rebounding from the 50-day SMA support. The price ignores short-term corrections and continues to rally toward the target of the ascending broadening wedge pattern in the $3,300–$3,350 region. The RSI indicates a bottom near a mid-level, supporting the strength of the ongoing bullish trend.

Gold 4-Hour Chart – Ascending Channel

The 4-hour chart for gold shows that the price is trading within an ascending channel and has broken above the channel at $3,200. While the short-term trend indicates overbought conditions, the emergence of bullish price action within the channel suggests strong upward momentum. These forces may drive prices to much higher levels.

Silver (XAG) Technical Analysis

Silver Daily Chart – Pivotal Support

The daily chart for silver shows that the recent correction hit pivotal support near the $27–$27.50 zone and triggered a strong rebound. Since the price has closed above the 200-day SMA, it is likely to continue higher toward $35. A break above $35 will open the door to a move toward $40.

Silver 4-Hour Chart – Rebound

The 4-hour chart for silver shows that the price has rebounded from the strong support region at $28. This rebound is pushing prices toward the immediate resistance at $32.50. A break above $32.50 will confirm the bullish trend and support further upside.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Bearish Pressure

The daily chart for the US Dollar Index shows a breakdown below the long-term support at 100.65. This breakout may have led to a decline toward the 97 and 96 levels. Despite oversold conditions indicated by the RSI, the index will likely continue trending lower.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that it trades within a descending channel. The index has entered a short-term downtrend and is approaching the 99 level. Although extreme oversold conditions may trigger a short-term rebound, the trend remains bearish.