- Gold price rallies over 1.00% on Thursday after the US President left fresh tariff comments overnight.
- Trump signed a proclamation to implement 25% tariffs on auto imports.
- Gold traders keep buying Bullion as uncertainty rises.
Gold price (XAU/USD) surges higher on Thursday, gaining around 1.00%, trading at $3,053 at the time of writing. The pop in the precious metal was infused by United States President Donald Trump, who issued fresh new tariffs. Trump signed a proclamation for a 25% tariff on auto imports on Wednesday. The squeeze in Gold prices accelerates just hours ahead of the US trading session on Thursday.
In addition, President Trump suggested that further and mounting tariffs can be imposed on the European Union and Canada if both territories work together to “do the US economy harm”. Trump threatened with more levies on lumber, semiconductors and pharmaceutical drugs. All these new unleashed tariffs, levies and threats make the market’s assessment on what will actually come on April 2nd and 3rd, with the already announced reciprocal tariffs very unclear and full of contradictions.
Daily digest market movers: Board based buying
- President Donald Trump signed a proclamation to implement a 25% tariff on auto imports and floated further duties on the EU and Canada, expanding the trade war and triggering threats of retaliation. “What we’re going to be doing is a 25% tariff on all cars that are not made in the United States,” Trump said at the White House on Wednesday as he pushed ahead with a program seeking to bring more manufacturing jobs to the US, Bloomberg reports.
- Sibanye and Gold Fields are engaged in a high-stakes battle with the Rand West City Local Municipality over the valuations of the companies’ properties, setting off a tit-for-tat legal wrangle that has been raging for nearly a decade, according to an article on BusinessDay. Meanwhile, Gold Fields is still stuck in the acquisition bidding war with Australian miner Gold Road Resources.
- Goldman Sachs ramped up its Gold price forecast to $3,300 by year-end, citing stronger-than-expected central bank demand and solid inflows into bullion-backed exchange traded funds (ETFs).
Gold Price Technical Analysis: US session just around the corner
With the tariff picture for April 2nd now becoming even less clear, it makes sense for traders to reside in a safe haven spot, which is Gold, helping the bullish trend to continue.
On the upside, the daily R1 resistance for XAU/USD comes in at $3,030 and already got broken earlier this Thursday. Further up, the R2 resistance at $3,040 is just below Friday’s high. This means this level is a heavy barrier before pointing to the current all-time high of $3,057.
On the downside, the intraday S1 support for Gold price stands at $3,010, preceding the $3,000 mark, which can be perceived as a bullish sign. That means the $3,000 mark is no longer exposed and has some circuit-breaking element beforehand to slow down any downmoves. Further down, the S2 support comes in at $3,001, which coincides with the $3,000 marker psychological level.
XAU/USD: Daily Chart
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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