Unlike the struggling cryptocurrency and stock markets, gold has benefited from its status as a safe-haven asset.
Even as it reached a new all-time high of $3,125, the price of gold maintained its discordance with the cryptocurrency and stock markets this week. It is one of the best-performing assets of the year, having surged for five weeks in a row.
On the other hand, the cryptocurrency market has seen a market cap decline of more than $1 trillion in the last several months, and it shows no signs of stopping.
Gold Price Surges Ahead of Liberation Day
Since gold surpassed all other safe-haven assets in popularity this year, the XAU/USD price has been steadily rising. Fears among investors stem from the fact that on “Liberation Day,” Donald Trump is expected to announce tariffs that will be reciprocated against the majority of US trade partners.
In the last several weeks, he has already announced further significant levies. All imported autos and parts were subject to 25% taxes, which he announced only last week.
In addition, he levied a 25% tax on aluminum and steel imported from outside, as well as a 25% duty on commodities imported from Mexico and Canada.
Since gold has served as a safe haven for investors over the past few decades, its price has been steadily climbing as a result. Data also shows that a growing number of nations are increasing their gold imports, including China, Turkey, and Russia.
Investors are bracing for a deterioration in US-international relations, which has contributed to a spike in the price of gold. For instance, reports indicate that Trump was very furious’ with Putin during the ongoing ceasefire negotiations, which could be an indication that talks between the US and Russia are not progressing well.
Thus, several bullish triggers, including demand for safe-haven assets, purchases by central banks, and increasing tensions between the US and other countries, have combined to send the price of gold surging.
XAU/USD Technical Analysis
According to trend-following principles and technical analysis, the gold price is expected to continue rising for the foreseeable future. A rising triangle pattern’s upper side is at $2,787, a critical resistance level that it has already surpassed.
There has been no movement in gold prices below the 50-week EMA. Another indicator that momentum is building is the spike in the Average Directional Index (ADX), which has reached 47.
There is no doubt that gold prices will continue to rise, with $3,500 serving as the next level to monitor. The bullish prediction will be rendered useless if the price falls below the $2,787 support level.
Coincident with the collapse of the cryptocurrency market, the price of gold surged. The price of bitcoin has plummeted from $109,300, its all-time high, to $82,000.
Other cryptocurrencies’ prices have also fallen, including Shiba Inu, Ethereum, and XRP.The growing concern that Trump’s tariffs would trigger a global economic downturn has caused these coins’ values to plummet.
As previous commentators have claimed, their collapse proves that Bitcoin is not a safe haven asset. However, there is hope that Bitcoin and other crypto market participants will recover once the uncertainty subsides.
This optimism is due to the fact that the Federal Reserve’s intervention through interest rate cuts and quantitative easing has historically resulted in riskier assets performing well during recessions.
