Gold Reaches New High as Trump’s Tariffs Fuel Inflation Concerns

Gold Hits Record High as Trump’s Tariffs Spark Inflation Fears

Market Overview

On Tuesday, gold prices hit a record high on Monday, as President Trump’s announcement of tariffs raised concerns about inflation and its potential impact on economic growth. US crude oil dropped over 1%, trading near $72.38 per barrel. The OPEC+ Joint Ministerial Monitoring Committee (JMMC) discussed Trump’s call for increased oil production during their meeting on Monday.

Gold Overview

Gold prices experienced narrow fluctuations on Tuesday, trading around $2,815.74 per ounce. On Monday, gold initially fell before rebounding. The announcement of tariffs on Canada, China, and Mexico by President Trump heightened concerns that inflation would negatively affect economic growth. This led to the US dollar index surging over 1%, pushing gold down to around $2,772. However, gold quickly regained ground due to risk-off buying and bargain hunting.

Additionally, following Trump’s delay in imposing tariffs on Canada and Mexico, the US dollar index retraced its gains, providing an opportunity for gold to rise again. Gold peaked at $2,830.39 per ounce before closing at $1,814.38.

Trump announced that, starting Tuesday, he would impose a 25% tariff on imports from Canada and Mexico, and a 10% tariff on Chinese goods, which heightened fears that a trade war could slow global economic growth and lead to rising inflation.

In response, Canada and Mexico announced retaliatory measures, while China stated it would challenge the tariffs at the World Trade Organization (WTO) and take countermeasures, though no specifics were revealed.

Technical Analysis for Gold

Gold Reaches New High as Trump’s Tariffs Fuel Inflation Concerns — (Gold Futures, 1-day chart)

Gold initially faced resistance around the $2,805 level and quickly declined. Support is expected at the $2,800 level. If prices stabilize here, a bullish outlook is still possible. Short-term resistance is seen around $2,828–$2,830. A short position can be considered if the price touches $2,830 and reverses. The key support level for gold in the short term is $2,770. Overall, the strategy remains to buy on dips and sell on rallies within this range.

Today’s Focus – Gold

Strategy: Consider shorting on rallies while watching for further declines.
Resistance Levels: $2,828–$2,830.
Support Levels: $2,800.

Oil Overview

Oil prices fluctuated on Monday but Brent crude futures closed at a one-month low due to the expiration of higher-priced March contracts and the market’s digestion of Trump’s proposed tariffs on Canada and Mexico.

Concerns about US tariffs on two of the largest oil suppliers supported a rise in oil prices earlier in the session, but after Trump announced a one-month delay in tariffs on Mexico, oil prices retraced. Mexico agreed to enhance its northern border to stop the flow of illegal drugs, particularly fentanyl.

Brent Crude (April delivery): Rose by $0.29 (+0.4%), closing at $75.96 per barrel.
WTI Crude: Increased by $0.63 (+0.9%), closing at $73.16 per barrel.

This was the lowest closing price for Brent crude since January 2, as the expiration of higher-priced March contracts brought down the April contract prices.

OPEC+ agreed to continue its policy of gradually increasing oil production starting in April. Additionally, the US Energy Information Administration (EIA) has been excluded from OPEC+ monitoring data sources. OPEC+ is an alliance of oil-producing countries, including OPEC members and Russia.

Technical Analysis for Oil

Oil prices rebounded but faced resistance around the $75.1 level and then declined. In the evening session, prices continued to drop, breaking through the $73 level and nearing $72 before weakly rebounding. The daily candlestick shows a bearish reversal pattern, and the oil market continues to face downward pressure above the $75 level.

Today’s Focus – Oil

Strategy: Maintain a bearish outlook and consider short positions.
Resistance Levels: $73.8–$74.
Support Levels: $72.25–$72.3.

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