Gold bulls retain control near all-time peak, despite overbought conditions

Gold Price Attracts Safe-Haven Flows for Third Straight Day Amid Rising Trade Tensions

Lead: The gold price (XAU/USD) remains in a strong uptrend, with the recent surge to a near-record high driven by safe-haven flows and uncertainty over US President Donald Trump’s so-called reciprocal tariffs, which may lead to a US recession and geopolitical risks. The anti-risk flow is evident from the general weaker tone in the equity markets, pushing the safe-haven precious metal higher for the third straight day.

Daily Digest: Market Movers – Gold Price Buying Remains Unabated as US Tariff Uncertainty Continues to Boost Safe-Haven Demand

• US President Donald Trump rattled markets by imposing a 25% levy on all non-American cars and light trucks ahead of the so-called reciprocal tariffs set to take effect on April 2.
• Trump’s reciprocity threats against a broader range of countries, including Russia, Ukraine, and China, push the safe-haven gold price to a fresh record high during the Asian session on Monday.
• The US Personal Consumption Expenditures (PCE) Price Index rose 0.3% in February and 2.5% from a year ago – in line with market expectations – while the core gauge showed a 0.4% increase for the month, lifted the 12-month inflation rate to 2.8% during the reported month.
• Consumer Spending accelerated 0.4% following a downwardly revised 0.3% fall in January, while Personal Income posted a 0.8% rise during the reported month.
• The University of Michigan’s survey showed consumers’ 12-month inflation expectations soared to the highest level in nearly 2.5 years in March, benefiting the precious metal’s hedge against rising prices.
• The path of least resistance for the gold price remains to the upside, despite overbought conditions on the daily chart.

Gold Price Technical Setup Supports Prospects for Additional Gains; Overbought RSI on the Daily Warrants Some Caution

• The Relative Strength Index (RSI) on the daily chart remains above the 70 mark for the third straight day and points to overstretched conditions, prompting some caution for bullish traders.
• The fundamental backdrop suggests that the path of least resistance for the gold price remains to the upside, with any corrective pullback finding decent support near the Asian session low, around the $3,076 area.
• Traders now look forward to this week’s important US macro releases, including the Nonfarm Payrolls (NFP) report on Friday, with the overbought conditions on the daily RSI warranting some caution in the near term.

Keywords: Gold Price, Safe-Haven Flows, Reciprocal Tariffs, US Tariffs, Trade Tensions, Fed Rate Cut, Stock Market, Bullion.

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