Gold prices rebounded on Monday, reclaiming the $2,900 per ounce level after experiencing their sharpest intraday drop in two months. As investors sought refuge from looming trade tensions and a weakening US dollar, gold’s status as a safe-haven asset continued to shine.
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Gold Recovers Despite Overbought Signals
In late afternoon trading, gold futures for April delivery climbed to $2,911 per ounce, marking a 0.4% increase in holiday-thinned markets. Despite recent sell-offs, analysts remain bullish, expecting further gains driven by geopolitical uncertainties and strong central bank demand.
📉 Key market indicators suggest gold was in overbought territory, according to Bloomberg’s 14-day relative strength index (RSI), which tracks the intensity of price movements. However, traders shrugged off technical signals as broader macroeconomic factors supported bullion prices.
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Weakening Dollar Adds Momentum to Gold’s Rally
💵 The US dollar hovered near a two-month low, making gold more attractive for foreign buyers. With lower retail sales data reinforcing expectations of Federal Reserve interest rate cuts by September, the dollar’s weakness is expected to further support gold’s long-term uptrend.
🔍 According to UBS analyst Giovanni Staunovo, “Gold is still benefiting from investors looking for safe-haven assets amid concerns of tariffs and trade wars. We continue to see upside potential, with gold expected to break $3,000 per ounce, driven by ongoing central bank demand.”
Trump’s Tariff Threats Stoke Trade War Fears
🇺🇸 President Donald Trump reignited trade war concerns by reaffirming planned automobile tariffs set to take effect on April 2. This latest move is part of a series of aggressive trade policies since his return to office, further fueling economic uncertainty and reinforcing gold’s appeal as a hedge against volatility.
Meanwhile, geopolitical tensions remain high as US Secretary of State Marco Rubio stated that any potential Ukraine-Russia peace negotiations must include Kyiv and European allies.
📊 Morgan Stanley cautioned that if a Russia-Ukraine peace deal materializes, central bank demand for gold may soften, potentially slowing its upward trajectory.
Federal Reserve Policy & Economic Data Under Scrutiny
📉 Traders are closely watching US economic indicators for signs of the Federal Reserve’s next policy move. Retail sales data released on Friday showed the sharpest decline in nearly two years, leading to renewed speculation that interest rate cuts could arrive by September.
💰 Lower interest rates typically weaken the US dollar and increase gold’s appeal, as the non-yielding asset becomes more attractive in a lower-rate environment.
📈 Despite Friday’s dip, gold secured its seventh consecutive weekly gain, marking its longest winning streak since 2020.
What’s Next? Gold Eyes $3,000 as Market Uncertainty Grows
With economic and geopolitical risks on the rise, gold remains a crucial hedge against volatility. As markets react to tariff threats, Federal Reserve policy, and central bank demand, investors are watching for a potential break above $3,000 per ounce in the coming months.
⏳ Will gold continue its unstoppable rally, or will shifting economic conditions slow its ascent? Stay tuned as the bullion market enters a critical phase!
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