Gold continues its way up into record high territory amid an uncertain global environment

The exceptional nature of this rally becomes even more evident when compared to the performance of other assets. While gold clearly stands in positive territory, most key categories remain in the red. Only emerging market equities manage a modest gain of around 4%. Other assets, including Bitcoin, global and US equities, oil, and the dollar, remain in negative territory, affected by a global environment of uncertainty and volatility.

The main driver behind this exceptional gold rally is the growing concern over escalating trade and geopolitical tensions, largely fueled by recent decisions and warnings from US President Donald Trump. The president plans to impose new reciprocal tariffs starting April 2, a move aimed at correcting trade imbalances that has nonetheless sparked uncertainty about its potential global economic consequences.

Additionally, Trump has heightened market anxiety by warning of secondary tariffs of up to 50% on Russian oil in the event of interference in Ukraine, while also maintaining an aggressive stance toward Iran should nuclear negotiations fail. This intensification of trade and geopolitical tensions is pushing investors toward safe-haven assets, with gold emerging as a secure refuge amid uncertainty.

The current market dynamic also presents a unique feature compared to previous cycles, as many traditionally safe-haven assets, particularly those tied to Western economies, are now under scrutiny due to mounting political and trade tensions. This unique scenario further reinforces gold’s appeal, elevating it as virtually the only reliable option for investors across the globe.

However, the short-term outlook for gold will heavily depend on the evolution and confirmation of the announced tariff measures. If these turn out to be less aggressive than anticipated, a temporary pause in gold’s rally may occur. But if trade rhetoric continues to escalate and threats are harshly implemented, the global environment could become even more favorable for extending gold’s positive performance.
Lastly, the growing concern over global stagflation—a combination of low economic growth and high inflation—cannot be ignored. This scenario has historically been one of the most favorable environments for gold performance. This mounting fear could further support demand for the precious metal in the medium to long term, solidifying its role as the premier asset in challenging times.

Ultimately, gold begins the second quarter of the year from a historically strong position, supported by economic and geopolitical conditions that fully justify its current appeal. Investors and analysts will be closely watching upcoming global political and economic developments that will determine whether this unprecedented bullish trend continues.
Technical Analysis XAU/USD:

From a technical standpoint, the path of least resistance for gold remains to the upside. The previous key resistance level at $3,040 was easily breached, and currently, there are no negative divergences between price and oscillators, indicating that bullish momentum remains strong. The next relevant resistance levels are located at the psychological key level of $3,200 per ounce, followed by the 161.8% Fibonacci extension level from the previous bullish structure, situated at $3,351. While the move is technically extended, there are currently no clear signs on the chart suggesting a significant weakening of the current bullish momentum.”