GOLD PRICES SURGE AMID ESCALATING TARIFF DISPUTE: MARKET REACTIONS & OUTLOOK

• ESCALATING TRADE TENSIONS: TARIFFS DISPUTES, RETALIATION, AND BORDER REINFORCEMENTS
• UPCOMING CATALYST
• GOLD SHINES AMID TRADE UNCERTAINTIES: TECHNICAL OUTLOOK
   

In the midst of escalating trade uncertainties, gold maintained its position as the ultimate safe haven asset. The ongoing trade tensions between the U.S., China, Mexico, and Canada fueled heightened market volatility. As a result, gold prices surges to a record high of $2,830.55, on Monday the 3rd of February 2025. This reflected investors' flight to safety amid global economic concerns."

The U.S. dollar held firm Tuesday as Trump's tariff threats were seen as negotiation tactics after pausing measures on Mexico and Canada. Meanwhile, a 10% tariff on Chinese imports took effect, with analysts expecting ongoing volatility. In response to the imposed tariff, the dollar index rallied around 109.88, hence pressuring USD pairs across board at the beginning of the week.  However, for the yellow metal, it was the opposite as gold prices surges to create an all-time high.

ESCALATING TRADE DISPUTES / TENSIONS: TARIFFS, RETALIATION, AND BORDER REINFORCEMENTS
            As midnight struck Tuesday, President Trump's sweeping 10% tariffs on Chinese imports took effect, drawing a swift and defiant response from Beijing. According to state media, China will hit back starting next week Monday February 10th with a 15% tariff on U.S. coal and natural gas, alongside a 10% levy on crude oil, agricultural machinery, large vehicles, and pickup trucks. China's Ministry of Finance accused the U.S. of breaching WTO rules, warning that the move "undermines normal economic and trade cooperation" between the two nations and fails to solve America’s internal problems. Meanwhile, Trump announced a 30-day tariff pause specifically for Canada, citing its planned $1.3 billion border reinforcement initiative. This plan was unveiled by Canadian Prime Minister Justin Trudeau in December, promises "new choppers, technology, personnel, and increased resources" to combat organized crime and the alleged fentanyl flow into the U.S.
With tensions simmering, all eyes remain on how these economic powerhouses navigate the turbulent trade landscape.

UPCOMING CATALYST
This week's economic calendar is packed with key data releases that could shake up the markets. Later today, the US JOLTs report will be in focus, followed by Wednesday's big lineup featuring the ADP Employment Report, and PMI figures. On Thursday, traders will watch for the weekly unemployment claims, and finally, Friday will bring the much-anticipated January Jobs Report. With these high impact events, traders and investors should stay alert for potential market moving opportunities which has some element of risk too.

GOLD PRICE SURGE AMID TRADE UNCERTAINTIES: TECHNICAL OUTLOOK
From the technical perspective, On the 4H chart, gold spot has shown relentless bullish momentum, cementing its status as the go to safe haven during turbulent trade conditions.
Currently, prices are moving within a well-defined channel, with the red trendline acting as resistance and the green as support. In response to the recent tariff disputes, gold prices surges to create an all-time high of $2830.55 on Monday the 3rd of February, this new level currently acts as resistance as price struggle to break above it.
Now rebounding and currently trading around $2822.54 at 4:54pm GMT +4, prices are hovering with a key support level at $2,798.04. A break below this could drive prices down to $2773.64 and possibly $2745.03.
However, if trade disputes intensify and we have a mix from economic data in the cause of the week, then Gold may extend its bullish run, targeting $2840 and $2880, with further breakouts remaining on the table according to technical analysts. 

Fig. 1 Gold spot 4H trading view.