Gold Surges 14% to $3,190 as US Dollar Weakens, Trade Tensions Escalate

Spot gold prices reached a new all-time high, surpassing $3,190 per ounce during the early Asian trading session on Friday. This significant increase was driven by a combination of factors, including the weakening of the US Dollar and the escalating trade tensions between the United States and China. The precious metal's upward momentum has been robust, with technical indicators showing strong upward trends and the price extending beyond key moving averages.

The recent surge in gold prices can be attributed to the ongoing trade war between the United States and China. The announcement of a 90-day pause on reciprocal tariffs by US President Donald Trump initially boosted market optimism. However, the US Dollar faced downward pressure as investors remained concerned about the potential economic impact of the escalating trade conflict. The tariff situation remains complex, with levies on China increased to 145% and Canada and Mexico facing levies of 35%.

Economic data released earlier in the day also played a role in the gold price surge. The Consumer Price Index (CPI) figures for March showed a decline in inflationary pressures, with the annual CPI dropping to 2.4% from 2.8% in February. This was below the expected 2.6%, further weakening the US Dollar. Additionally, weekly unemployment claims rose by 223K, meeting market expectations and confirming the Federal Reserve's decision to maintain a cautious stance.

The technical outlook for gold remains bullish, with the daily chart indicating additional gains are likely. Technical indicators are trending upward, and the price has moved beyond the 20 Simple Moving Average (SMA), currently at $3,052. The 100 and 200 SMAs are also trending northward but are far below the current price level. In the near term, the 4-hour chart shows that gold is bullish, with technical indicators reaching fresh highs and maintaining their upward slopes, although overbought conditions are indicated.

Support levels for gold are at $3,148.90, $3,132.45, and $3,119.20, while resistance levels are at $3,175.00, $3,190.00, and $3,205.00. The fundamental outlook remains positive, with the precious metal benefiting from the weakening US Dollar and the ongoing trade tensions. Investors are closely monitoring the situation, and any further developments in the trade war or economic data releases could impact gold prices.