Gold Is Waiting for Trump and Xi to Talk

Gold prices surged by 2.3% to $2,865 per troy ounce, setting another all-time high of $2,883 on Wednesday—the fifth consecutive peak in a remarkable rally. Prices have been steadily advancing, surpassing the $2,750–2,780 resistance level last Thursday before reaching the $2,850–2,880 range. A slight retreat is now forming a consolidation pattern, though a continued rally without pullback remains a possibility.

Uncertainty surrounding U.S. President Donald Trump's latest trade measures is a key driver of gold’s ascent. Trump signed an executive order imposing a 10% tariff on all Chinese imports, prompting China's President Xi Jinping to respond with a similar 10% tariff on U.S. exports of coal, crude oil, and LNG. The White House has announced trade talks with China scheduled for Thursday, though no updates have emerged so far.

Gold’s surge follows a clear pattern: heightened trade tensions lead China to increase its gold reserves, fueling demand. This trend is reflected in gold’s 4.4% rally over the past five days. Even de-escalation can support gold, as easing tensions lower U.S. borrowing costs, making gold more attractive to investors. U.S. 10-year Treasury yields have declined from 4.80% on January 14 to 4.53%, further supporting gold demand. The SPDR Gold Trust (GLD) reported $1.73 billion in net inflows over the past three weeks, with the first week marking a record since March 2024. Gold prices have climbed 5% during this period.

Meanwhile, 10-year yields have continued their decline, now at 4.44% this week, after Trump postponed tariffs on Canada and Mexico, reinforcing gold’s appeal. If U.S.-China negotiations yield a similar outcome, gold could rise further, though an initial consolidation phase is likely. Escalating trade tensions, however, would accelerate the rally. If prices break above the $2,750–2,780 range, the path toward extreme targets at $3,150–3,250 would open. For now, a move above $2,850–2,880 would solidify the bullish trajectory, with $2,950–2,980 as the next key target.