Trump’s next move post-Fed could keep the gold rally alive

Donald Trump’s got markets on a rollercoaster again - and investors are holding their breath. Fresh off the Federal Reserve’s hawkish pause, all eyes are now on Trump’s next bold step in the ongoing U.S.-China trade showdown. 

Forget calm and predictable: Trump just declared he has zero intentions of easing the hefty 145% tariffs on Chinese imports to bring China back to the negotiating table. Buckle up because this ride is far from over.

Trade Tariffs, tweets, and talks

Despite high-level discussions scheduled this weekend in Switzerland, featuring U.S. heavyweights Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, Trump isn’t budging - at least not publicly. “We don’t have to sign deals,” Trump bluntly remarked, shifting pressure onto China. 

Just days earlier, he teased flexibility, saying tariffs might eventually be reduced "because otherwise, you could never do business with them.” Mixed signals much?

The current tariff war has been escalating since early 2023, with tariffs progressively jumping from 25% to a staggering 145%, marking one of the sharpest trade confrontations in recent memory. 

This whiplash-inducing rhetoric leaves markets jittery, especially as China quietly exempts some U.S. goods from its retaliatory tariffs, aiming to lower temperatures without losing face. Meanwhile, Trump’s threats are expanding: pharmaceuticals and even foreign-made movies could soon face steep tariffs. Ford has already raised alarm bells, warning of significant disruptions from the ongoing trade war.

Safe havens shine bright: Post-Fed gold rally

Amid this chaos, investors are seeking shelter, and gold is happily stepping into the spotlight again. After briefly slipping following the Fed’s announcement, the precious metal quickly found fresh appeal as economic anxieties resurfaced. Investors, wary of a weakening dollar amid Trump’s unpredictable policies, are pouring back into gold, keeping the rally alive.

Bitcoin is joining the safe-haven party too. Often dubbed digital gold, Bitcoin surged nearly 2%, edging toward the $96,700 mark. 

Bitcoin ETF inflows

Data from Farside highlighted this bullish sentiment, showing that after a sharp $85 million outflow on Tuesday, the US Bitcoin ETF attracted over $105 million in inflows following the Fed’s decision on Wednesday. Clearly, investors are hedging their bets, diversifying into digital assets amid ongoing economic turbulence.

Meanwhile, the World Gold Council reported central banks from China, Poland, and the Czech Republic increased their bullion reserves in April, reinforcing gold’s reputation as a reliable global safe haven during uncertain times.

Global watch: Japan joins the wait-and-see crowd

In Japan, central bankers are cautiously watching Trump’s moves unfold. Minutes from the Bank of Japan’s latest meeting show readiness to hike rates if economic and inflation goals are hit. Yet BoJ members stressed the need for cautious decisiveness, mindful that the U.S. policy twists could ripple through global markets.

As Trump continues to play hardball on the global economic stage, investors remain alert - and defensive. With no immediate end to the trade turbulence in sight, gold and Bitcoin are poised to remain attractive havens, proving once again that when markets shake, safety shines.

Gold technical analysis

Gold has recently displayed strong buy momentum on the daily chart, which was followed up by strong downside momentum. Volume bars tell the story of heightened bearish pressure, which appears to be waning. Should prices continue to slide, they could find support at the $3,265 and $3,200 support levels. If we see a rebound, prices could encounter resistance at the $3,360, $3,435, and $3,500 resistance levels.

Bitcoin technical analysis

Bitcoin, on the other hand, has been displaying bullish signals, with bulls looking to return to highs of $100,000. Volume bars indicate that bullish momentum may be waning, so we could see a dip before a decisive move towards $100,000. Before racing towards $100,000, bulls will have to navigate the $99,380 resistance level, which could see significant profit-taking. On the downside, if prices see a slide, they could be held at the $92,680 and $92,757 support levels.

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