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Gold has started the new quarter hitting fresh record highs, following a massive first quarter during which it rallied 19% and broke lots of milestones, including surpassing the $3000 mark. Today we have seen a bit of a rebound in equity indices in Europe following the late comeback on Wall Street the day before. However, it remains to be seen whether risk will return meaningfully ahead of Trump’s eagerly anticipated reciprocal tariff plan, due to be announced on Wednesday during an event in the White House Rose Garden. The scope of his tariffs remains uncertain, and the ambiguity over whether the US president will adopt a softer or more aggressive stance is making investors hesitant to take on risky stock positions. All this uncertainty has helped to keep gold prices supported, smashing level after level to break to new uncharted territories with minimal pullbacks.  I can’t imagine gold heading meaningfully lower ahead of Wednesday’s tariffs announcement. But later in the week, there is a chance for gold to at least pause for a breather – especially if Trump opts for a softer stance on tariffs. Much of the bad news regarding tariffs is also now priced in, you’d imagine.
 

Market Jitters Ahead of "Liberation Day"

In recent days, Trump’s latest tariff escalation has sent ripples across global markets. US equities continued their descent last week, with the S&P 500 index shedding another 2% on Friday following the announcement of new tariffs on imported vehicles. On Monday, the markets slumped further before a late day reversal saw the major indices trim most of those losses. This morning, US futures were stable. Traders are now fixated on Trump’s next move: a sweeping expansion of levies set to be unveiled on April 2—dubbed "Liberation Day" by the president himself. The premise? Raising barriers to imports will supposedly bolster domestic production and create jobs. The reality? Many fear the move could stoke inflation while simultaneously dragging down growth, a dangerous cocktail for an already fragile market.
 

Can gold continue to rise?

Well for now the price of gold continues to find support amid haven flows as equities remain volatile on trade war concerns. But how much further can gold rise before staging an inevitable correction?  Well, I think a lot of people had $3K+ pencilled in as their target. We are obviously well above the $3K level now at almost $3150 following a 4-day rally.

So, some profit-taking should be expected at these levels, but that alone will not cause a meaningful drop in prices.

How about if equity prices continue to drop – will that keep haven flows intact for gold? I think it will to some degree. But if the pace of stocks selling gathers sharply, then people might be forced to liquidate their profitable long gold positions to free up margin. Could we see something similar?

Fundamentally, there are several potential headwinds that could undermine gold – none of which have played out so far. For example, if geopolitical tensions ease—think Trump’s promises to resolve conflicts in Ukraine and Gaza—then it can be assumed that safe-haven demand for gold could fade. Judging by recent events, unfortunately this doesn’t appear likely in the near-term.

Additionally, high prices might motivate miners to ramp up supply, although that’s another big assumption as supply adjustments are not always easy to achieve and can take time. Meanwhile, elevated prices could also temper central bank appetite for further purchases. 
 

Technical analysis: Gold bulls still in control

The fact that gold is technically overbought on multiple time frames, including the long-term charts, hasn’t been enough to slow the rally yet. This goes to show that no lagging indicator is reliable and what matters the most is price itself. Gold continues to make higher highs and higher lows. That’s the most important thing. Until such a time that it stops making those higher highs and higher lows, there is no point in trying to pick the top. Therefore, gold remains in the “buy-the-dip” mode, and one should just concentrate on support levels where one can take advantage of those dips.

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With that in mind, here are a few support levels to watch for potential trading opportunities:

• $3127: Yesterday’s high and first line of defence for the bulls
• $3086: The high from Friday and also of last week
• $3032-$3057: The last area of resistance prior to the recent breakout, making it a key support zone to watch for the dip buyers
• $3,000: This is a psychologically significant level and the fact we are holding above it confirms bullish control. A potential break below this could trigger long liquidations until prices potentially reach…
• $2,930-$2,956: This zone, the former breakout area, also aligns a trend line, making it the next major support area to watch.

On the upside, there are no obvious resistance levels to watch as prices trade at record levels. Only round handles like $3200 etc., are important.

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