Gold hits new All-Time High as US stocks slide ahead of 'Liberation Day'
US stocks face another heavy selloff as gold continues to push to new highs, driven by higher PCE and tariff threats.
US equities faced another wave of selling last week, while gold (XAU/USD) surged to a new all-time high as investor confidence deteriorated. The trigger? A stronger-than-expected reading in the Core Personal Consumption Expenditures (PCE) Price Index, which climbed to 2.8% year-over-year in February—up from 2.7% in January and well above the expected 2.6%.
Inflation & Trade Tensions Rattle Markets
The inflation data compounded existing market jitters. President Trump confirmed that 25% tariffs on all imported auto parts will take effect on April 2nd, stoking fears of a global trade war. Over the weekend, reports suggested he may push for even broader tariffs under a single flat-rate system starting on Wednesday's "Liberation Day."
These developments have put equity markets under pressure. Consumer confidence is waning, and the rise in core inflation has sparked doubts over whether the Federal Reserve will be able to deliver further rate cuts this year—despite Chair Powell’s dovish guidance earlier this month. With the latest inflation readings unlikely to fully reflect the impact of new tariffs, concerns are mounting that price pressures may prove more persistent than previously thought.
Equity Market Breakdown
As a result, the Nasdaq 100 and S&P 500 have fallen back below previous resistance levels after being rejected at their respective 200-day simple moving averages (SMAs). The bullish breakout attempts fizzled as the Relative Strength Index (RSI) remained below the 50 mark.
The Nasdaq is now threatening to fall below the 19,000 level for the first time since September. The next major support may emerge around 18,560, a level to watch as volatility picks up into April.
US 100 daily chart
Past performance is not a reliable indicator of future results.
Gold Extends Bullish Breakout
While stocks falter, gold continues to shine. The metal's status as a safe haven has been reinforced by tightening financial conditions, falling bond yields, and a weaker US dollar. As foreign demand for US assets drops due to lower yields, the environment becomes increasingly supportive for non-yielding assets like gold.
Last week’s shallow pullback in gold failed to break the $3,000 level, turning former resistance into solid support. Friday's bullish candlestick confirmed a breakout above the ascending channel, keeping the uptrend intact despite overbought RSI conditions.
Looking ahead, the next resistance may come near $3,200, where gold could meet an ascending trendline drawn from the June 2023 highs. While technicals hint at potential short-term consolidation, the broader bullish momentum remains firmly in place.
XAU/USD daily chart
Past performance is not a reliable indicator of future results.