Gold prices (XAU/USD) have experienced a slight pullback from earlier gains and are holding onto modest intraday gains ahead of the US trading session on Tuesday. The precious metal is trading just above $3,130, with an all-time high of $3,149 reached earlier in the day. Investors remain cautious but continue to seek refuge in gold, with US President Donald Trump set to announce reciprocal tariffs on Wednesday at 19:00 GMT.
US Economic Data and Tariffs to Shape Market Sentiment
Traders are preparing for a week full of important US economic data, with the focus on the highly anticipated Nonfarm Payrolls release on Friday. In the lead-up to the NFP report, several key data points will be published, providing further insight into the state of the US economy. Richmond Federal Reserve (Fed) Bank President Thomas Barkin noted during a CNBC interview that the economic outlook is uncertain, with policymakers struggling to determine the direction of interest rates amid ongoing recession fears.
Gold’s Surge Boosts South African Mining Stocks
Gold’s recent surge has had a positive impact on South African mining stocks, which recorded their best monthly performance on record in March, with a 33% increase. This strong performance helped shield the country’s benchmark index from the broader turmoil in global markets, according to Reuters.
Gold Price Outlook: Continued Rally Expected, but Caution Advised
Despite the recent gains, some caution is warranted as the market anticipates the official announcement of reciprocal tariffs. The “buy the rumor, sell the fact” strategy may apply here, as gold prices could experience a temporary pullback once the tariffs take effect. This could result in profit-taking in gold and a shift in market sentiment once trade agreements and partial unwinds come into play.
On the upside, the daily R1 resistance level at $3,142 has already been tested in Tuesday’s rally, with the R2 resistance at $3,160 still a possible target later in the US trading session. If the rally continues, the broader target could extend towards $3,200.
Support Levels and Potential Downside Risks
On the downside, the daily pivot point at $3,109 is expected to provide support against any selling pressure. Further down, the S1 support at $3,091 could be tested, but it would not completely erase the gains made in previous sessions. The S2 support at $3,058 offers additional protection, ensuring that gold is unlikely to fall below the $3,000 mark in the near term.
Conclusion
As gold continues to benefit from both physical demand and a favorable macroeconomic backdrop, the outlook remains positive. However, with the looming tariff announcement and key US economic data releases, traders should remain vigilant. While gold prices could face some short-term volatility, the long-term bullish trend remains intact, with price targets potentially reaching $3,300 or higher later this year.