Gold (XAU) Surges Above $2,920 as Trade War Escalates

Gold (XAU/USD) price breaks $2,920 amid rising trade tensions, with markets reacting to new tariffs imposed by the United States on Canada, Mexico, and China.

XAU Climbs on Global Trade Uncertainty

The gold market is experiencing significant movement, with XAU/USD stretching higher to around $2,915 in a volatile trading session. The precious metal surged over 1% on the previous day and is poised for another 1% increase on Tuesday, driven by escalating geopolitical tensions and trade uncertainties.

Tariff Tensions Spark XAU Market Reaction

United States President Donald Trump has confirmed the implementation of tariffs targeting Canada, Mexico, and China, despite previous speculation about potential extensions. This decisive move has sent ripples through global markets, creating an environment of uncertainty that traditionally supports gold as a safe-haven asset.

International Retaliation Builds Pressure

The international response has been swift and decisive:

• Canada announced 25% tariffs on US imports worth C$30 billion, with additional tariffs on C$125 billion of products to be implemented in 21 days.
• China's Ministry declared additional tariffs of up to 15% on key US agricultural imports, including chicken, pork, soy, and beef, effective March 10.

XAU Supported by Market Volatility

The current market landscape presents several key factors supporting gold's price:

1. US 10-year benchmark yields have dropped to nearly five-month lows, reaching 4.11% in early Asian trading.
2. The CME Fedwatch tool indicates an 85.6% market expectation of a Federal Reserve interest rate cut by June.
3. Concerns about potential stagflation in the US economy are driving investors toward safe-haven assets.

Technical Analysis: XAU Price Movements

Technical indicators suggest a complex trading environment for gold:

1. Daily Pivot Point at $2,879 and R1 resistance at $2,903 provide initial support
2. Potential resistance at daily R2 level of $2,917
3. The critical support level at S1 is $2,866, converging with Thursday's low
4. An all-time high of $2,956 (reached on February 24) remains a key reference point

Geopolitical Factors Influencing XAU

Additional market-moving news includes:

• A pause in US military aid to Ukraine
• Ongoing concerns about global trade tensions
• Persistent inflation fears in major economies

The current market conditions demonstrate gold's role as a critical safe-haven asset, with XAU responding dynamically to global economic and geopolitical shifts.