Over the past three trading sessions, gold had started to show a strong bearish bias, posting a decline of more than 5%, largely due to heightened market volatility. However, buying pressure has re-emerged today, pushing the price up by more than 1% in recent hours. This rebound is mainly driven by new statements from China, which have confirmed that the ongoing trade war is far from over. As a result, gold is once again benefiting from its role as a safe haven asset.

The Back-and-Forth of the Tariff War

Yesterday, market risk sentiment intensified after Donald Trump announced the possibility of additional 50% tariffs on China, following Beijing’s refusal to accept reciprocal tariffs imposed by the White House last week. This new tariff package could take effect on April 9, and Trump stated he expects a quick response to avoid further escalation.

China responded — and likely not in the way the U.S. expected. The Chinese government declared that it is ready to fight to the end in this trade conflict and that it will not yield to U.S. pressure. If all proposed measures are enacted, China could face a total tariff burden of 104% on its exports to the United States, summing up all of Trump’s proposals over time.

Although the outcome of this confrontation between the world’s two largest economies remains unclear, the economic impact could be substantial. China exports over $400 billion annually to the U.S., and that figure could drop significantly in this scenario. This has already started to erode market confidence, pointing to a weaker global growth outlook.

In these types of environments, investors tend to avoid risk assets, reinforcing gold’s role as a global safe haven. Despite some recent downward corrections, XAU/USD remains a solid option for those looking to protect capital. If uncertainty continues to rise, demand for gold may strengthen again, potentially stabilizing buying pressure in the short term.

Confidence Continues to Decline

The Fear & Greed Index, published by CNN, has started to register extreme levels. It currently sits at 5, a reading not seen in years, placing the market in a clear zone of “extreme fear”, driven by the intensifying tariff war.

Source: CNN

Since October 2024, the index has followed a clear downward trend, falling from 71 (greed zone) to its current value. This decline has accelerated since the trade tensions erupted in February, and the market is showing no clear signs of confidence recovery. If the trade war continues in a consistent and aggressive tone, the index is likely to remain in extreme fear territory over the next sessions.

Source: CNN

All of this suggests that the loss of confidence has been a key factor in recent months and now reflects a significant level of global economic uncertainty. As long as the index remains at these levels, gold—the ultimate safe haven asset—is likely to continue attracting capital from investors seeking protection from volatility. If this environment persists, bullish pressure on XAU/USD may strengthen even further in the coming months.

Gold Technical Outlook

Source: StoneX, Tradingview

• Uptrend: Gold’s bullish structure has remained intact in recent months. Since the beginning of 2025, the price has formed a steeper upward trendline, successfully breaking the psychological barrier of $3,000 per ounce. The most recent major pullback has not broken this key support, keeping the uptrend as the dominant structure in the short term.

   

• RSI: The RSI has gradually approached the neutral 50 line, but bearish movements have not yet broken through. This suggests that the price has found relevant support and is currently attempting to stabilize. As long as the RSI remains near the 50 level, technical neutrality in XAU/USD may persist.

   

• TRIX: The TRIX line remains well above the zero line, indicating that bullish momentum in the moving averages remains dominant. Unless the indicator drops significantly, this could continue to support a mild bullish bias in the coming trading sessions.

   

   

  Key Levels to Watch:

   

• $3,136 – Major Resistance: This level marks recent all-time highs, where gold has encountered strong resistance. A breakout above this level would confirm the ongoing uptrend and open the door for stronger bullish momentum.

   

• $3,000 – Critical Support: This remains the most important psychological barrier in the short term and aligns with the current ascending trendline. A breakdown below this level could trigger a deeper bearish correction.

   

• $2,860 – Distant Support: This level coincides with the Ichimoku cloud, acting as an important support zone. If the price approaches this area, the bullish structure would be at risk, potentially giving way to a more consolidated bearish bias.

Written by Julian Pineda, CFA – Market Analyst