Gold’s reversal from all-time highs near $4,180 found support at $4,090 earlier on Tuesday. The precious metal trimmed losses in risk-off markets amid simmering tensions between the US and China, returning to the $4,125 area during the European trading session.

News that the US and China were rolling out new fees for cargo vessels entering their ports has shattered expectations of a de-escalation of the trade rift between the world’s two major economies, and provided fresh demand to traditional safe-havens like Gold.

Technical Analysis: In a bullish trend towards $4,200

The 4-hour chart shows the RSI coming down from oversold levels, although, in the current fundamental context, downside attempts are likely to remain limited.

Bears have been contained at $4,090 (intraday low) on Tuesday. Further down, the previous all-time high, at $4.050 area (October 8, 9 highs is likely to challenge bears ahead of the $4,000 psychological level, and the October 7 and 10 lows, at the $3,940 area.

To the upside, the intraday high at $4,080 is the closest resistance, although the $4,200 round level might attract bulls. Beyond here, a Fibonacci extension tool shows the 461.8% extension of the mid-September rally, at $4,278.

Gold is stretching its record-setting run early Tuesday, as the bullish sentiment remains unabated amid looming US-China trade risks and in anticipation of US Federal Reserve (Fed) Chair Jerome Powell’s speech later in the day.  

Gold remains a ‘buy-on-pullbacks’ trade

Amidst a pause in the US Dollar’s (USD) overnight rebound and ongoing US-China trade talks, Gold buyers flex their muscles.

China’s Commerce Ministry confirmed early Tuesday that it had notified the US. in advance of its new rare earth export controls and held working-level talks on Monday under existing trade consultation channels.

Meanwhile, US Treasury Secretary Scott Bessent said on Monday that President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October.

The underlying positive factors, such as persistent expectations that the Fed will deliver two interest rate cuts this year, the extended US government shutdown and potential US-China trade war escalation continue to lend support to buyers.

Gold’s record-setting advance remains powered by the bullish inertia, in the absence of any bearish fundamentals.

Traders now look forward to a slew of speeches from the Fed officials, including Chairman Jerome Powell’s, for fresh hints on the scope of rate cuts by the year-end.

Powell is due to speak about the “Economic Outlook and Monetary Policy” at the National Association for Business Economics (NABE) Annual Meeting, Philadelphia.

Gold price technical analysis: Daily chart

The daily chart shows that the 14-day Relative Strength Index (RSI) is back into the extreme overbought zone, currently near 82.50,

Meanwhile, Gold buyers are once again challenging the upper boundary of the month-long rising channel, now at $4,162.

Gold could see a brief corrective pullback if it faces rejection at the abovementioned level amid heavily overbought RSI conditions.

In that case, sellers could attack the lower boundary of the rising channel at $4,014.

A daily candlestick closing basis below the latter would confirm a downside break from the channel, fuelling further correction toward the $3,950 psychological mark.

Further south, the $3,895 supply zone (October 1 and 2 highs) could come into play.

However, if buyers manage to take out the topside hurdle of the channel at $4,162 on a sustained basis, the record-setting rally could extend toward the $4,200 round level.

Silver price (XAG/USD) attracts some buyers to near $52.60 during the early Asian session on Tuesday. The white metal has reached a fresh all-time high, surpassing its previous peak from 1980, as a historic short squeeze in London intensified. 

The rally in Silver price is bolstered by concerns over a depleting silver inventory in London, which drove prices to a premium over those seen in New York and prompted traders to ship metals across the Atlantic for a profit.  

Additionally, global trade uncertainties have fueled safe-haven demand, supporting the precious metal. US President Donald Trump on Friday threatened an additional 100% tariff on Chinese goods from November 1 in retaliation for new export controls Beijing is planning for valuable rare earth minerals.  

Dovish remarks from the Federal Reserve (Fed) officials also lift the Silver price. Philadelphia Fed new President Anna Paulson said on Monday that rising risks to the job market argue for more interest rate cuts by the US central bank, as trade tariffs now appear unlikely to push up inflation as much as expected. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal. 

On the other hand, renewed US Dollar (USD) demand and improved risk sentiment could weigh on the USD-denominated commodity price in the near term. Trump changed his rhetoric on China on Sunday, saying that China’s economy “will be fine” and that the US wants to “help China, not hurt it.”

Gold price (XAU/USD) jumps to a fresh record high near $4,130 during the early Asian session on Tuesday. The precious metal extends the rally as renewed US-China trade tensions send investors flocking to safe-haven assets. The Federal Reserve’s (Fed) Chair Jerome Powell is scheduled to speak later on Tuesday.

Escalating trade tensions between the US and China reignited fears of a trade war between the world’s two largest economies, boosting safe-haven assets like the Gold price. US President Donald Trump announced on Friday that he will impose new trade measures against Beijing, including 100% tariffs on all Chinese goods and export controls on critical US-developed software, due to take effect by 1 November. 

Nonetheless, Trump adopted a less strident stance on Sunday, saying that everything would be “fine” and that the US was not looking to “hurt” China.

Expectations mounted for further interest rate cuts by the US Fed, which contributes to Gold’s upside. Markets are currently pricing in an almost certain 25 basis points (bps) rate cut at the Fed’s October meeting, with another reduction expected in December, according to the CME FedWatch tool. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Further consolidation or correction cannot be ruled out in the near term, as the yellow metal has climbed over 56% year-to-date so far this year. “Given the carousel of drivers, and how short-lived dips have been, this rally has legs in our view, but a near-term correction would be healthier for a longer-term uptrend,” said Suki Cooper, global head, commodities research at Standard Chartered Bank.