Gold Analysis
Afternoon: Gold Market Outlook Amid Tariff Implementation and Geopolitical Shifts
Highlights:
- Gold surged above $3,020 on safe-haven demand amid tariff and geopolitical uncertainties.
- Key technical levels: support at $3,000 and resistance at $3,048; recommended action is to sell on a jump around $3,032 targeting $3,005.
- Market awaits Fed speeches, US PCE data, and key economic releases that could shape future gold dynamics.
Overview:
Recent market activity saw gold surge above $3,020, bolstered by its safe-haven appeal as investors brace for the upcoming implementation of US reciprocal tariffs. Although President Donald Trump's tariff plan—scheduled for April 2—is anticipated to be more focused and limited than previous measures, it still represents a substantial escalation in trade barriers that could affect the United States and its trade partners. This uncertainty has further strengthened demand for gold as investors seek protection against market volatility.
Adding to the complexity of the landscape, market participants are keenly awaiting speeches from several Federal Reserve officials, which are expected to provide insights into this year's monetary policy direction. In conjunction with these policy cues, Friday's US Personal Consumption Expenditures (PCE) data is anticipated to offer further hints regarding the Fed's next course of action. These developments are critical as they may influence the risk appetite of investors, potentially altering gold’s safe-haven dynamics.
On the geopolitical front, significant developments occurred on Tuesday when the US secured deals with Ukraine and Russia aimed at halting strikes at sea and on energy targets. This diplomatic initiative, coupled with promises to press for sanctions relief against Moscow, has the potential to significantly diminish gold’s appeal as a protective asset, as reduced geopolitical tensions typically ease investor concerns.
Economic Indicators
Key economic indicators slated for release, such as Core Durable Goods Orders m/m, Durable Goods Orders m/m, and Crude Oil Inventories from the US Zone, will further influence market sentiment. These data points, alongside the evolving trade and geopolitical scenarios, create a nuanced environment where technical analysis remains pivotal.
Technical View:
From a technical perspective, gold prices are supported at $3,000 and face resistance at $3,048. In the Indian market, MCX Gold prices find support at 87,000 and resistance at 88,100. The recommended action is to sell on a jump around $3,022-25, with a target of $3,005, while implementing a stop loss above $3,048. This strategy is designed to capture gains while mitigating risk should price movements reverse unexpectedly.
Support & Resistance Levels:
