Daily Price Outlook
Gold prices (XAU/USD) have struggled to maintain their upward momentum, recently dropping to the 2,972 level. Despite a brief rebound, the precious metal is currently trading with modest losses as the European session begins.
This decline is driven by persistent concerns over a potential global recession and escalating geopolitical tensions, which continue to weigh on investor sentiment, limiting gold’s ability to gain traction.
US Dollar Weakness and Fed Rate-Cut Speculation Supports Gold
On the US front, the broad-based US dollar has started the week on a weaker note, fueled by expectations that a tariffs-driven slowdown in the US economy could prompt the Federal Reserve (Fed) to resume rate cuts soon. This, along with a sharp drop in US Treasury bond yields, has provided support to gold.
Despite a strong US Nonfarm Payrolls (NFP) report and hawkish comments from Fed Chair Jerome Powell, investors are pricing in multiple rate cuts this year.
As a result, the USD has struggled to attract buyers, while gold has seen a brief recovery from its recent lows.
However, gold's recovery lacks momentum, as investors remain cautious, unwinding bullish positions to cover losses from a broader market sell-off.
This caution stems from fears that the recent pullback in gold, after reaching all-time highs last week, may not be over yet.
Geopolitical Risks and the Global Trade War Weigh on Investor Sentiment
On the geopolitical front, the widening global trade war has raised concerns about a potential global economic recession, leading to an extended sell-off in equity markets.
This risk-off sentiment caused traders to liquidate long positions in gold, seeking liquidity to cover losses elsewhere. Geopolitical tensions have continued to rise, particularly with the ongoing trade dispute between the US and China.
US President Donald Trump’s decision to impose 10% tariffs on all imported goods, with 54% tariffs specifically on China, has raised fears of a long trade war. In response, China imposed additional tariffs on US goods, escalating the conflict.
These ongoing trade tensions have created more uncertainty, boosting gold’s appeal as a safe-haven asset.
Moreover, data from the People’s Bank of China (PBOC) reveals that China increased its gold reserves for the fifth month in a row in March, signaling concerns about the economic impact of rising geopolitical risks.
China’s gold holdings grew by 0.09 million troy ounces, highlighting the growing importance of gold as a safe-haven asset during times of global uncertainty.
GOLD (XAU/USD) – Technical Analysis
Gold prices are under pressure following a decisive breakdown below both the ascending trendline and the $3,046 horizontal support, which previously acted as a pivot area for bulls. After slipping as low as $3,003, buyers briefly stepped in near the 200-period EMA, but the rebound lacked conviction.
Price is currently pinned under the $3,046 resistance zone and struggling to reclaim ground above $3,062. This resistance band, once supportive, now acts as a ceiling for any meaningful recovery. The technical landscape has turned bearish unless gold reclaims and closes above the $3,062 level.
The broader market structure also reflects caution, as the 50 EMA at $3,101.72 is now sloping downward, providing additional headwind. Meanwhile, the RSI sits at 39.81, suggesting bearish momentum is in play but not yet stretched enough to imply oversold conditions.
A break below the $3,013 handle would signal renewed selling pressure, opening the path toward the psychological support at $3,000 and possibly extending to $2,970, the next major horizontal demand zone.
Bulls would need to regain control above $3,062 to neutralize the bearish bias and make a case for a push toward the 50 EMA and $3,087. Until that happens, any upside moves are likely to be viewed as relief rallies rather than the start of a sustained uptrend.
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