Gold prices surged over 1% on Solana price USD chartMonday following escalating trade tensions between major economies.
Investors are flocking to precious metals as primary hedge against potential economic disruptions.
Technical indicators suggest the rally could potentially reach $3,000 if current momentum persists.
The gold market witnessed extraordinary activity as XAU/USD reached record-breaking levels above $2,900 during Monday's trading session. This upward movement follows recent statements from US officials regarding potential reciprocal trade measures against multiple nations, injecting volatility into global financial markets. Over the weekend, policymakers hinted at substantial import levies on specific industrial materials, though implementation timelines remain unspecified.
Market participants are closely monitoring upcoming congressional testimony from Federal Reserve leadership for insights into monetary policy direction. The central bank's stance on interest rates could significantly influence gold's trajectory, with current projections indicating minimal likelihood of near-term rate reductions. Such monetary policy stability typically presents headwinds for non-yielding assets like gold, making the current rally particularly noteworthy.
Market Dynamics: Evaluating Gold's Valuation
Reports indicate some Asian markets are experiencing reduced gold demand at current price levels, with certain institutional buyers temporarily pausing acquisition programs.
The proposed reciprocal tariff structure would align US import duties with those imposed by trading partners, potentially disrupting global supply chains.
Interest rate futures suggest overwhelming consensus for maintaining current Fed policy in March, with only marginal expectations for potential easing.
Technical Perspective: Analyzing Gold's Momentum
Gold's technical setup reveals remarkable strength as prices establish new historic highs early in the trading week. The $3,000 psychological barrier appears increasingly within reach, though market participants should remain alert for potential profit-taking activity that could trigger short-term pullbacks.
Critical support levels begin at $2,866, with additional floors at $2,846 and $2,832 respectively. The $2,790 level represents a more substantial support zone that previously capped upside movements during late 2024. Resistance levels have been breached during Monday's session, with the $2,900 threshold now serving as the next significant technical challenge that could determine whether the rally extends toward higher targets.
Market technicians note that gold's relative strength indicators are approaching overbought territory, suggesting the possibility of consolidation before any potential continuation of the upward trend. The metal's ability to maintain positions above recently broken resistance levels will be crucial for confirming the sustainability of current bullish momentum.
