Gold hits new high of $4,750 as US assets pressured by trade tensions and bond market slump
Gold Hits New All-Time High Amid Global Uncertainty
The price of gold (XAU/USD) soared above $4,750 on Tuesday, reaching a fresh record near $4,766. This surge comes as geopolitical tensions intensify, including a trade dispute between the United States and the European Union, and a sharp rise in global bond yields following a lackluster 20-year debt auction, as reported by Bloomberg. At the latest update, gold was trading at $4,758, marking a gain of over 3.5% for the day.
Safe-Haven Demand Drives Precious Metals Higher
Growing risk aversion has propelled precious metals to unprecedented levels. Silver also jumped, reaching $95.86 per troy ounce, as US Treasury yields remain elevated. The prevailing sentiment of moving away from American assets has led to declines in both the US Dollar and equities, while US yields continue to climb, reflecting waning confidence in US financial markets.
Highlighting this trend, a Danish pension fund announced plans to divest from US Treasuries by month’s end, citing concerns over credit risks stemming from President Donald Trump’s policies, according to Bloomberg.
Over the weekend, it emerged that President Trump threatened tariffs on eight European countries unless an agreement was reached regarding the annexation or purchase of Greenland. In response, European nations prepared retaliatory measures, with the European Union reportedly readying €93 billion in tariffs, as detailed by the Financial Times. French President Emmanuel Macron emphasized that Europe would not yield to intimidation, escalating his criticism of the US administration.
Key Market Drivers: Gold Defies Rising Yields on Flight to Safety
- US Treasury yields surged again on Tuesday, with the 10-year note climbing 6.5 basis points to 4.291%, its highest since September 2025. Meanwhile, the US Dollar Index (DXY), which measures the dollar against six major currencies, dropped 0.46% to 98.58.
- President Trump announced that the US will impose 10% tariffs on Denmark, Norway, Sweden, France, Germany, Finland, the Netherlands, and the UK starting February 1. If no agreements are reached, these tariffs will rise to 25% on June 1, linking the move to US intentions regarding Greenland.
- Recent US economic data showed the ADP Employment Change 4-week average at 8,000, down from the previous week’s 11,750. Despite the weaker numbers, traders remain doubtful that the Federal Reserve will lower interest rates at its January meeting.
- Swap markets are pricing in 46 basis points of Federal Reserve rate cuts by year-end.
Source: Prime Market Terminal
Technical Outlook: Gold Sets New Peak Above $4,750
During the North American trading session, gold reached a historic high of $4,766, with bullish momentum targeting the $4,800 level. The metal continues to form higher highs and higher lows, but the Relative Strength Index (RSI) signals that the rally may be overextended, as it remains in overbought territory and has yet to surpass the latest peak.
If XAU/USD breaks above $4,800, the next resistance is expected at $4,900, with the significant $5,000 threshold beyond that. Conversely, a drop below $4,700 could see support at $4,600, followed by the January 16 low of $4,536.
Gold Daily Chart
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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