Will Trump’s tariff war keep gold glowing?

Just when investors thought they could catch a breather after the Fed’s latest move, Donald Trump decided it was time to stir things up again. Welcome back to the thrilling theme park ride known as the U.S.-China trade war - fasten your seatbelts, folks, because Trump’s tariff train isn’t slowing down!

Trump recently confirmed he’s holding firm on his eye-watering 145% tariffs on Chinese goods. So much for easing tensions! Negotiations are set to remain intense as Trump sends clear signals: No deals just yet, unless they’re on his terms.

Trade talks, tweets, and tariff twists

High-level U.S.-China talks are set for this weekend in Switzerland, featuring Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. But Trump isn’t exactly extending an olive branch, bluntly reminding everyone, “We don’t have to sign deals.” Just days before, he hinted at potentially easing tariffs to make negotiations viable. Talk about mixed messages!

Since 2023, the tariff tit-for-tat has escalated dramatically, from 25% to a staggering 145%, sending market jitters through the roof. China’s strategy? 

Source: Observer Diplomat magazine

Quietly cutting tariffs on selected U.S. goods, trying to cool things down without losing credibility. But Trump’s threats aren’t slowing down - in fact, pharmaceuticals and foreign films might soon be next on the chopping block. Even Ford is feeling the heat, warning of big disruptions ahead.

Gold shines bright amid market drama

With all this uncertainty, it’s no wonder investors are diving back into safe havens - and gold is happily basking in renewed glory. After briefly stumbling post-Fed, gold quickly bounced back, driven by fresh worries about Trump’s unpredictable next moves and a shaky U.S. dollar.

Not to be outdone, Bitcoin (affectionately known as “digital gold”) also jumped nearly 2%, flirting with $96,700 levels. Safe-haven, digital edition, anyone?

Source: TradingView

Bitcoin ETFs back in action

The rollercoaster continued in crypto too. After a swift $85 million outflow from the U.S. Bitcoin ETF earlier this week, investors raced back in with a $105 million inflow after the Fed’s decision. It seems diversification into digital assets is looking attractive amid ongoing uncertainty.

Source: Farside

And gold? The World Gold Council reported bullish buying from central banks, with China, Poland, and the Czech Republic all adding shiny new reserves in April. Clearly, global banks are prepping for uncertain times ahead.

Global spotlight: Japan’s wait-and-watch game

Meanwhile, over in Japan, the central bank is cautiously eyeing Trump’s every move. Bank of Japan minutes show policymakers ready to hike rates if inflation and economic targets align, but they’re wary. They know a sudden twist from the U.S. could send global ripples their way.

With Trump keeping the pressure on China, investors aren’t likely to relax anytime soon. But gold and Bitcoin holders? They’re looking pretty comfortable right now. Turns out, when the markets get bumpy, safe havens love to shine.

Gold technical analysis

Gold has recently displayed strong buy momentum on the daily chart, which was followed up by strong downside momentum. Volume bars tell the story of heightened bearish pressure, which appears to be waning. Should prices continue to slide, they could find support at the $3,265 and $3,200 support levels. If we see a rebound, prices could encounter resistance at the $3,360, $3,435, and $3,500 resistance levels.

Source: Deriv X

Bitcoin technical analysis

Bitcoin, on the other hand, has been displaying bullish signals, with bulls looking to return to highs of $100,000. Volume bars indicate that bullish momentum may be waning, so we could see a dip before a decisive move towards $100,000. Before racing towards $100,000, bulls will have to navigate the $99,380 resistance level, which could see significant profit-taking. On the downside, if prices see a slide, they could be held at the $92,680 and $92,757 support levels.

Source: Deriv X

Disclaimer:

The information contained within this article is for educational purposes only and is not intended as financial or investment advice. We recommend you do your own research before making any trading decisions.

This information is considered accurate and correct at the date of publication. Changes in circumstances after the time of publication may impact the accuracy of the information.

The performance figures quoted are not a guarantee of future performance.