Gold soars to record high and counting

Fundamental News and Triggers

  • Due to concerns about Trump’s tariffs and a worldwide trade war, the price of gold continues to be optimistic. The Dollar Index is under pressure from declining US bond yields, which also provide more support for the precious metal.
  • Since assuming office on January 20, Trump has raised tariffs on steel and aluminium by 25% and placed an extra 10% on imports from China.
  • President Donald Trump further escalated global trade tensions earlier this week when he announced intentions to impose further tariffs on lumber, automobiles, semiconductors, and pharmaceuticals. These duties follow the 10% duty on Chinese imports and the 25% tariff on steel and aluminium.
  • Geopolitical concerns were increased by reports that Trump would sideline Kyiv and its European allies in talks with Russia by withdrawing US support for Ukraine.
  • According to minutes of the FOMC’s most recent policy meeting, which took place in January and was made public on Wednesday, officials saw a high level of uncertainty, which means the central bank must exercise caution when evaluating any more interest rate decreases.

 

Technical Triggers

  • Gold Apr Futures trades at a new record high of $2973 (~Rs 83560) today, having cleared the resistance of $2965 (~Rs 86300) on the continued uncertain environment of tariffs. Prices are moving towards the next psychological resistance, targeting $3000 (~Rs 87200-300) and beyond. USD INR appreciation may limit gains in domestic markets.

 

Support and Resistance

 

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