Gold (XAU/USD) Price Eyes Acceptance Above $4100/oz on US-China Trade War Fears, Up 2% on the Day

[Redator]

Gold sailed toward $4100/oz on Monday with the precious metal trading up around 2% on the day.

The precious metal saw a significant selloff last week which looked like it could be the start of a significant retracement before renewed tension between the US-China sent market participants fleeing toward safe havens once more.

Trade tensions between the US and China escalated when US President Donald Trump announced plans to impose massive 100% tariffs on all Chinese imports starting November 1st, a move that caught market participants by surprise.

This dramatic announcement followed China's own recent decision to control the export of rare earth elements, which are vital materials, raising fears about disruptions to global supply chains. President Trump claimed on social media that China was becoming "very hostile" by outlining these export controls to multiple countries.

However, over the weekend, Trump softened his stance, reassuring the public that everything would "be fine" and that the US wanted to "help China, not hurt it." This slight shift in tone offered some relief to nervous markets.

US Treasury Secretary Scott Bessent confirmed on Monday that despite the high tensions, President Trump and Chinese President Xi Jinping are still scheduled to meet later this month.

Bessent called China's export controls "provocative" but stressed that the proposed 100% tariffs "doesn't have to happen" if China takes steps to ease the situation and remains open to talks.

China's Commerce Ministry responded by warning that if the US continues its aggressive approach, Beijing will take strong countermeasures to protect its interests.

Today's rally also comes as the US Dollar Index rose as well despite US markets closed for a holiday.

Gold continued a recent trend which has seen the precious metal shrug off USD strength to continue its advance. For more on this, read Who said that the USD and Gold can't rally together?

Of course there has been a lot of discussion around the Gold rally in 2025 and the possible factors contributing to the rise of the precious metal. Many of those factors remain in play, but today's move appears to be largely driven by the US-China trade war question and its implications for global growth.

Most Read: Gold's (XAU/USD) Bull Run Just Getting Started? A Look at What History Says

Looking Ahead

Looking ahead to the rest of the week, Federal Reserve Chairman Jerome Powell's speech on Tuesday may well be the most important event for market participants. This will be his last chance to speak before the central bank enters its "blackout period."

This "blackout" is a quiet time before the Fed's October 29-30 meeting when officials stop making public comments to avoid confusing the market about their upcoming interest rate decisions.

Meanwhile, the crucial Consumer Price Index (CPI) report, a key measure of inflation will be delayed due to the recent government shutdown but is now scheduled to be released on October 24th, giving the Fed just enough time to review the inflation data before their meeting.

Several other Fed officials are also scheduled to give speeches throughout the week, adding to the information the market will receive before the official silence begins.

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Technical Analysis - Gold (XAU/USD)

From a technical standpoint, it is very difficult to pick a top at the moment. Not to mention that the lack of historical price action makes it near impossible.

Usually market participants would hope for some form of pullback after such a move.

The RSI period-14 is back in overbought territory after last week's foray below the neutral 50 level.

Such a move is likely to depend on how trade talks develop between the US-China in the coming days.

Any signs of escalation will see Gold continue tor rise, while signs of a deal is likely to lead to a pullback and some profit taking.

Immediate support rests at 4050 before 4025 and 4000 come into focus.

On the upside I will be watching the 4150 and 4250 handle closely.

Gold (XAU/USD) Four-Hour Chart, October 13, 2025

Source: TradingView (click to enlarge)

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