• Gold is heading back above $2,900 in a rather soft trading day. 
  • Geopolitical headlines will take over markets this week with headlines around Ukraine.  
  • A daily close above $2,900 would be beneficial for more upside in Gold this week.

Gold’s price (XAU/USD) is orbiting around $2,900 again at the time of writing on Monday after its steep correction on Friday. While United States (US) markets are closed due to the President’s Day bank holiday, the Federal Reserve (Fed) is not. On a rather windstill trading day, no less than three Fed speakers will issue comments in an otherwise empty macroeconomic calendar. 

Meanwhile, the weekend was filled again with several geopolitical news and comments. US President Donald Trump and Russian President Vladimir Putin are set to meet each other in Saudi Arabia to discuss peace within Ukraine. Neither Ukraine nor Europe are invited to these talks, while both US and Russian officials are already underway. 

Daily digest market movers: US officials are landing in Riyadh

  • Market participants are waiting for more insights on President Trump’s reciprocal tariff plans, which could heighten global trade tensions. Next to that, levies on automobiles would be coming as soon as April 2, Bloomberg reports. 
  • If Senator Cynthia Lummis’ proposal becomes more concrete, Bitcoin could join Gold. The senator suggested adding Bitcoin to the US reserves on Sunday, highlighting the blockchain network's transparency and accessibility.
  • At 14:30 GMT, Federal Reserve Bank of Philadelphia Patrick Harker delivers a speech on the economic outlook at the Central Banking Series Conference at the University of the Bahamas in Nassau.
  • At 15:20 GMT, Fed Governor Michelle W. Bowman delivers brief remarks on the economy and bank regulation at the American Bankers Association (ABA) Conference for Community Bankers in Phoenix, Arizona.
  • Closing off this Monday, at 23:00 GMT, Fed Governor Christopher J. Waller speaks on the economic outlook at the UNSW Macroeconomic Workshop in Sydney, Australia.

Technical Analysis: False breaks 

Gold recovers and trades back above $2,900 on Monday following the near 1.5% decline on Friday. However, keep in mind that US bond markets are closed on Monday due to the President’s Day bank holiday. Look out for the headlines on Ukraine and possible new announcements on tariffs. 

The first support level on Monday, the S1 support, stands at $2,859. Further down, the S2 support at $2,836 should act as a safeguard and prevent any additional declines to the more significant $2,790 level (October 31, 2024, high).

On the upside, the Daily Pivot at $2,899 is the first level to reclaim again. Next, the R1 resistance at $2,922 is the first level that needs to be recovered, followed by the R2 resistance at $2,962. Further up, the $3,000 psychological level could be next.

XAU/USD: Daily Chart

XAU/USD: Daily Chart

US-China Trade War FAQs

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

 

Source: Fxstreet