Gold Price Forecast: XAU/USD record rally pauses on Trump’s tariff concession

Gold price builds on Friday’s pullback from record highs of $3,245 early Monday.
Trump’s lower tariffs on Chinese electronics and chips offer relief to markets.
Technically, Gold could see a brief correction before the next leg up.

Dhwani Mehta FXStreet

Gold price is sustaining its retreat from all-time highs of $3,245 reached on Friday, reverting toward $3,200 early Monday.

Gold price keeps a close eye on tariff talks

Having posted an outstanding 6.5% weekly gain, Gold price kicks off a new week on the back foot, pausing its three-day record-setting rally. The latest downtick in Gold price could be attributed to the positive shift in risk sentiment following a tumultuous week.

US President Donald Trump’s tariff concession on the Chinese electronics supply chain, hopes of more stimulus coming from China and Beijing’s stance of ignoring further US responses have offered markets some relief, diminishing the safe-haven appeal of the Gold price.

Trump clarified late Sunday that there will be no tariff exemption on semiconductors and the electronics supply chain but these products will be subject to the existing 20% tariffs on fentanyl and not the 145% levies.

This comes after China said on Friday that it will ignore further US responses after raising tariffs on US good to 125%, in retaliation to Trump’s 145% tariffs.

Meanwhile, Chinese policymakers vow to step up stimulus to cushion the world's second-largest economy from the impact of the escalating trade war with the United States (US).

Gold price also bears the brunt of some progress on the US-Iran geopolitical talks. According to Reuters, US envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi spoke for around 45 minutes on Saturday, with the Trump administration reportedly satisfied with the first round of talks. The second round of negotiations are expected to continue later this week.

That said, any dip in Gold price is likely to be bought in as traders remain wary about tariff talks and ahead of Wednesday’s Chinese first-quarter growth figures. Markets also remain unnerved as the US earnings season begins later this week.

In the meantime, Gold traders will look forward to China’s March trade data. However, the data is unlikely to show the full impact of the US-Sino trade war. Later in the day, several Federal Reserve (Fed) policymakers are scheduled to speak. Their take on Trump’s tariffs and hints on the Fed’s next interest rate move could provide some trading incentives in Gold price.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) has eased from the overbought region to currently trade near 69, suggesting that the corrective pullback will likely be shallow.

The first area of contention for sellers is at the $3,200 threshold, below which Friday’s low of $3,176 will be challenged.

Additional declines could test the $3,100 round level, followed by the 21-day Simple Moving Average (SMA) resistance-turned-support at $3,074.

Conversely, the record high of $3,245 is the immediate topside barrier for Gold buyers. Scaling that level will open the door toward the $3,300 mark.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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