Gold Prices Clock All-Time High Amid Tariff Concerns

The price of gold climbed to a record high for the second-consecutive day between $3,077-3,078 on March 28. The sentiment in global equity markets remains weak amid Donald Trump’s auto tariffs, which is set to take effect from April 3. Trump’s reciprocal tariffs and its possible repercussions in the global economy have promoted investors to place their bets in the yellow metal.

Meanwhile, Trump’s reciprocal tariffs will dampen US growth and will also force the Federal Reserve to cut the interest rates. These scenarios will keep the US dollar on a weak spot.

Key global factors to take note of

1. US President Donald Trump on March 26 announced a 25% tariff on imported cars and light trucks, set to take into effect from April 3.

2. The Federal Reserve may lower the borrowing costs again at its June policy meeting amid worries about the tariffs-driven US economic slowdown.

3. The US dollar remains unaffected by better-than-expected US macro data released on March 27.

4. The Gross domestic product (GDP) of the US grew by 2.4% in Q3, against the estimated 2.3%.

As per US Department of Labor, the number of US citizens filing new applications for unemployment insurance came down to 224K compared to the previous week's revised tally of 225K.

From a technical point of view, gold’s bullish resistance near the $3,000-mark and its rally suggests that the path of least resistance for the Gold price remains to the upside. Relative Strength Index (RSI) on the daily chart is already flashing overbought conditions and warrants some caution. Therefore, investors are required to wait for some near-term consolidation.