28 Mar 2025

Gold prices have surged by over 0.7%, reaching a new all-time high of $3,086. As equities and cryptocurrencies decline, investors are flocking to the safe-haven asset of gold. Traders are now setting their sights on a target of $3,100 in the near future.

On Friday, the price of gold (XAU/USD) achieved another record, peaking at $3,086 and currently trading around $3,077. The precious metal is experiencing a fresh influx of safe-haven demand as investors shift away from equity and cryptocurrency investments. The next significant psychological milestone to surpass is $3,100.

Later today, the US Personal Consumption Expenditures (PCE) data for February will be released. The general expectation is for stable figures, with the monthly core PCE anticipated to hold steady at 0.3%, while the overall headline figure is also expected to remain at 0.3%.

In recent days, inflation concerns in the United States have intensified, as the effects of President Donald Trump’s tariffs on inflation are challenging to quantify. Investors are increasingly worried about the potential for the US economy to enter a recession or experience stagflation, which could lead to fluctuations in equity and bond markets and further bolster gold prices.

Daily market movers summary: PCE data and interest rates

Inflation rates in France and Spain fell short of expectations this Friday, bolstering arguments for additional interest rate reductions by the European Central Bank (ECB). The year-on-year Consumer Price Index in France increased by a modest 0.9% this month, contrary to analysts' forecasts of a rise. In Spain, inflation decelerated by 2.2%, marking a more significant slowdown than anticipated, and making it the first nation nearing the ECB's 2% target, according to Bloomberg.

Analysis of fair-value modeling indicates that Gold is currently 13% overvalued, implying that ongoing uncertainties regarding US tariff implementation have already been accounted for. A potential peace agreement for Ukraine could lead to a decline in the value of the precious metal as perceptions of geopolitical risks diminish, as reported by Reuters.

On Thursday, US President Donald Trump enacted a proclamation to impose a 25% tariff on automobile imports and warned of stricter penalties for the EU and Canada if they collaborate to inflict "economic harm" on the US, with the deadline for reciprocal tariff implementation approaching on April 2nd, as noted by Bloomberg.

Gold Price Technical Analysis: Currently Strong

Traders are increasingly losing confidence in Equities and Cryptocurrencies, making Gold the most attractive option at present. Analysts are progressively adjusting their forecasts for Gold to reflect higher price levels, indicating that the market may be approaching an 'overbought' condition. Participating in the current rally remains a viable strategy, but it is essential to monitor specific price levels to facilitate better decision-making regarding entry points, profit-taking, and stop-loss placements.

On the upside, the daily R1 resistance for XAU/USD is positioned at $3,072, which was tested earlier today. Higher up, the R2 resistance at $3,086 aligns with the recent all-time high. Although the $3,100 level may seem distant, the rally could potentially trend in that direction.

On the downside, the initial support level to watch is the daily Pivot Point at $3,044, followed by the intraday S1 support at $3,030. Further down, the S2 support is located at $3,002, which closely aligns with the psychologically significant $3,000 level.