Gold Reaches New All-Time Highs After Tariff Announcements

Recent bullish movements in gold have pushed its price up by more than 2% over the past three sessions, reaching a new all-time high zone at $2,800 per ounce. This strong movement has been driven by market uncertainty regarding the possibility of a new trade war.

Tariffs Shake the Markets

President Trump has confirmed the implementation of new tariffs on certain countries, which will take effect on February 4. So far, a 25% tariff has been applied to all imports from Canada and Mexico, along with an additional 10% tariff on oil and gas products from Canada. Additionally, a 10% tariff has been imposed on all products imported from China. The White House has justified these measures as part of its efforts to combat illegal migration and drug trafficking.

Responses from affected nations were swift. Canadian Prime Minister Justin Trudeau announced retaliatory tariffs against the United States. Meanwhile, Mexico declared that it will implement new economic measures to counteract the White House's threats. The European Union has also warned that strict measures will be taken if tariffs are imposed on EU member states.

For now, the situation remains critical, and confidence in international markets has rapidly deteriorated. The CNN Fear and Greed Index has fallen to 41, quickly shifting into the "fear" zone, indicating that uncertainty about a potential global trade conflict could negatively impact demand for financial assets. This has led to significant declines in major stock indices, with the S&P 500, DAX, and Nikkei all dropping by more than 2% in recent trading hours, reflecting the growing fear surrounding new tariffs.

Source: CNN

Amid this environment of global tension, gold has reinforced its role as a key safe-haven asset. Demand for the precious metal has risen considerably as economic uncertainty increases. So far, XAU/USD remains one of the most relevant assets for capital protection during times of crisis. If tariff announcements continue to generate market volatility, gold may experience increased buying pressure in the short term.

Gold Technical Forecast

Source: StoneX, Tradingview

Strong Trend: Since mid-February 2024, gold has maintained a strong upward trend, now reaching new all-time highs above $2,800 due to the growing interest in the precious metal. The 50- and 100-period moving averages continue to show a bullish slope and have begun to widen, indicating the strength of recent buying activity. However, the pace of buying is high, which could lead to short-term bearish corrections near the current resistance zone.
Possible Overbought Conditions:
- MACD: Both the MACD line and the signal line are approaching levels not seen since October 2024, reflecting an accelerated increase in buying pressure.
- RSI: The RSI line has climbed rapidly and is now oscillating above the 70 level, signaling a possible overbought zone and an imbalance between buying and selling pressure.
Both indicators suggest that gold may be overbought, which could lead to bearish corrections in the upcoming trading sessions.

Key Levels:
$2,780: A new support level derived from previous gold all-time highs. This could serve as a potential area for short-term bearish corrections.
$2,710: A key support level that coincides with consolidation zones from recent months. A drop below this level could raise doubts about the current bullish formation and open the door to a more pronounced bearish bias.
$2,850: A new tentative resistance level. If the price reaches or surpasses this level, it could confirm continued buying strength and extend the bullish trend in the coming sessions.

Written by Julian Pineda, CFA – Market Analyst

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.