Gold Price Falls as Markets React to Trump’s Tariff Plan

The gold price falls under pressure this Thursday, dropping over 1.25% to approximately $3,095. This decline was primarily driven by profit-taking activity. Investors reacted sharply to an unexpected announcement by President Donald Trump regarding a global “reciprocal” tariff plan. Consequently, this policy shift has triggered significant volatility across multiple asset classes.

Why the Gold Price Falls Amid Tariff News

Trump’s proposal introduces a minimum 10% base tariff on all U.S. imports. As a result, total tariffs on Chinese imports have surged to a staggering 54%. While gold is traditionally a safe haven, the initial market shock caused traders to liquidate positions to cover losses elsewhere.

However, the outlook isn’t entirely bearish. A White House fact sheet clarified that gold and other key metals are excluded from this specific new plan, as they are already covered under existing trade acts. This distinction provides some relief to U.S. manufacturers and buyers.

Economic Indicators and Rate Expectations

Despite the fact that the gold price falls today, gold mining companies in Asia actually saw a surge in demand. Investors remain concerned about a potential global slowdown. Furthermore, interest rate expectations are shifting. According to the CME FedWatch tool, markets are now pricing in a high probability of a Federal Reserve rate cut by June 2026.

Technical Outlook: What Happens After the Gold Price Falls?

Thursday’s market behavior appears to reflect a “buy the rumor, sell the fact” pattern, with prices adjusting as the anticipated policy was officially confirmed. Should negotiations between the U.S. and affected countries begin, it could help stabilize gold prices or even result in further corrections.

However, any retaliatory trade measures from other nations could reignite fears and drive gold toward new all-time highs.

In terms of technical analysis, resistance levels include R1 at $3,149 and the recent peak at $3,167, aligning with R2 at $3,165. A broader bullish target lies near the $3,200 level.

Support levels to watch are S1 at $3,111 and S2 at $3,089. Maintaining support above these points is critical to prevent a slip below the psychological $3,000 level.

Source: Adapted from FXStreet – “Gold price falls as markets reposition on Trump’s tariffs – the highest in over 100 years”, published April 3, 2025.