Gold surged to a new record high of $3149.09 on Tuesday, extending its remarkable rally as investors continue piling into the safe-haven asset. The move comes as markets brace for U.S. President Donald Trump’s upcoming announcement on sweeping reciprocal tariffs and rising geopolitical instability. The metal has now gained over $150 in just a few sessions, breaking away from technical support zones and pushing into overbought territory.
At 11:32 GMT, XAU/USD is trading $3131.375, up $7.655 or +0.25%.
Traders are positioning defensively as geopolitical risks escalate and trade tensions resurface. Trump’s plan to implement broad reciprocal tariffs—set to be unveiled Wednesday—has added to market uncertainty, boosting the appeal of gold. “Trump’s tariff comments and his increasingly volatile stance on Russia’s war against Ukraine are proving the perfect chaos for new record gold prices,” said Adrian Ash of BullionVault.
Further bolstering demand, Goldman Sachs raised the likelihood of a U.S. recession to 35%, expecting more Federal Reserve rate cuts this year. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, enhancing its attractiveness.
Carsten Menke at Julius Baer notes the ongoing rally has been supported by two critical pillars: sustained central bank accumulation since 2022 and renewed interest from Western investors seeking safety. Geopolitical instability in both the Middle East and Europe continues to feed safe-haven flows, with increased inflows into gold-backed ETFs reflecting broader investor conviction.
Despite the clear uptrend, gold is starting to look stretched. The Relative Strength Index (RSI) is trading above 70, signaling overbought conditions. Technical support lies at $2999.46, with the more significant 50-day moving average support climbing to $2918.48. Saxo Bank’s Ole Hansen cautions a pullback is overdue, suggesting a deeper correction would only be triggered if gold breaks below the $2955 zone.
The fundamental case for gold remains strong, underpinned by geopolitical stress, trade policy concerns, dovish rate expectations, and robust demand. However, with prices running hot and distancing from major technical support, a short-term pullback remains likely.
Traders may look to buy dips, with $3300 still seen as a key target over the medium term, barring a break below critical support levels. The broader outlook stays bullish.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.