Gold has become a safe haven once more after President Trump's talk of tariffs sparked concerns over a trade war. Earlier this week, the president announced that he would sign a sweeping 25% tariff on all steel and a 10% tariff on all aluminum imports. The Dow Jones Industrial Average fell more than 500 points in response, and the CBOE's Volatility Index (VIX) moved sharply higher amid concerns over possible trade conflicts.

Many popular gold exchange-traded funds (ETFs) moved higher in response to these concerns, which offset bearish expectations related to rising inflation. Rising bond yields had made zero-yielding gold assets less desirable as a safe-haven asset. The most popular gold fund, the SPDR Gold Trust ETF (GLD), rose 0.32% over the past two days, while the Direxion Daily Gold Miners 3X Bull ETF (NUGT) had risen more than 4.3% by early Friday. (See also: 8 Reasons to Own Gold.)

Technical chart showing the performance of the Direxion Gold Minders 3X Bull ETF (NUGT)

From a technical standpoint, gold prices made a double top in January and mid-February that many traders feared would mark the beginning of a new downtrend. The precious metal briefly broke below its prior reaction lows before rebounding above $1,300 levels. Meanwhile, the Direxion Daily Gold Miners 3X Bull ETF – the most popular trade for the rally – has similarly rebounded from its reaction lows and could find some technical support.

Traders should watch for a breakout from the pivot point at $25.64 to retest prior reaction highs near R1 resistance and the 50-day moving average at $29.70. A breakout from these levels could establish a new area of strong support. If the fund fails to break out, traders should watch for a renewed downtrend toward S1 support at $18.51. A breakdown from these levels could lead to a move toward S2 support at $14.28. (For more, see: Does It Still Pay to Invest in Gold?)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.