Gold prices continued to rise on Tuesday, gaining nearly 1% after a strong surge the previous day. The ongoing market rally comes as U.S. President Donald Trump confirmed new tariffs on Canada, Mexico, and China. Investors had hoped for an extension, but the administration moved forward with the decision. As a result, gold remains a key safe-haven asset in uncertain times.
Tariffs Hit Global Trade
The latest tariffs have sparked immediate reactions from affected countries. Canada and China have already announced retaliatory measures against U.S. imports. Canadian Prime Minister Justin Trudeau confirmed a 25% tariff on U.S. goods worth C$30 billion. Additional tariffs on C$125 billion worth of products will follow in 21 days.
Meanwhile, China’s Commerce Ministry responded with its own trade restrictions. Beijing will impose up to 15% tariffs on key U.S. agricultural products, including soy, pork, and beef. These new trade measures will take effect on March 10.
Market Reactions and Gold’s Rally
Gold prices climbed higher, with XAU/USD trading near $2,915 on Tuesday. Investors rushed toward gold as global markets faced turbulence. The uncertainty surrounding the trade war pushed U.S. bond yields lower, with the 10-year benchmark dropping to 4.11%. This marks a five-month low, increasing demand for gold.
The Federal Reserve is also under pressure to respond to these economic developments. The CME FedWatch tool shows an 85.6% probability of a rate cut by June. Rising inflation and slowing economic growth have raised fears of stagflation, adding further uncertainty to the financial markets.
Technical Outlook for Gold
Gold continues to show strength, with support levels forming around $2,879 and $2,903. If bullish momentum continues, prices could reach $2,917, with an all-time high of $2,956 still in sight. However, if gold faces selling pressure, support at $2,866 and $2,842 could prevent further declines.
As tariff uncertainty grips global markets, gold remains the go-to asset for investors. The ongoing trade war is likely to influence gold prices in the coming weeks. If economic tensions persist, gold’s value could climb even higher.
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