Daily Price Outlook
Gold prices (XAU/USD) have surged back toward the $3,050 mark during the early European session on Thursday. However, this bullish rally was driven by escalating US-China trade war, which could push the global economy into a recession. This heightened geopolitical uncertainty is fueling demand for safe-haven assets like gold, with investors seeking shelter amid fears of an economic slowdown.
In addition, the growing expectations that US tariffs may trigger a prolonged economic slowdown are boosting bets that the Federal Reserve (Fed) could resume its rate-cutting cycle, further driving the rally in precious metals.
US Dollar Weakness and Fed Rate-Cut Bets Boost Gold
Another factor that has been boosting the price of gold is the ongoing weakness of the US Dollar (USD). For the second day in a row, the USD has faced selling pressure as expectations grow that the Federal Reserve (Fed) may lower interest rates soon.
According to the CME Group’s FedWatch Tool, traders are now pricing in a 60% chance of a rate cut as early as May, with more cuts expected throughout 2025. This dovish outlook on US monetary policy has helped fuel gold’s upward trend, as the non-yielding precious metal becomes more appealing when interest rates are low.
Even though some Fed officials, like San Francisco Fed President Mary Daly, have expressed concerns about inflation due to tariffs, the market is still focused on the possibility of future rate cuts, weakening the USD and supporting gold.
Escalating US-China Trade Tensions Revive Safe-Haven Demand
On the geopolitical front, the intensifying trade war between the US and China is another major factor pushing gold’s price higher. The White House has confirmed that a 104% tariff on Chinese imports will take effect starting Wednesday, reigniting fears of a full-blown global trade war. This has led to increased risk aversion, with investors turning to safe-haven assets like gold to protect themselves from rising uncertainty.
Therefore, the potential for China to retaliate, including possibly selling US Treasuries, adds further complexity to the outlook for global markets, strengthening the support for gold’s rally.
Investors Eye Fed Minutes, CPI, and PPI Data for Direction
Looking ahead, traders are closely watching upcoming economic data, including the Fed’s minutes from its last meeting, as well as the US Consumer Price Index (CPI) and Producer Price Index (PPI) reports. These will offer key insights into inflation trends and the Fed’s future policy plans, which could affect both the USD and gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold prices are showing early signs of recovery, trading around $3,023 after finding firm support near the $2,990 region. This level has now been tested multiple times, reinforcing its role as a key pivot.
Buyers have defended this support well, with prices rebounding toward $3,040. Still, the metal remains capped below the 50 EMA, which currently sits at $3,075—a zone that also aligns with horizontal resistance near $3,057.
If gold breaks above this resistance area, the next upside targets are $3,084 and $3,152. Meanwhile, on the downside, $2,990 remains critical. A sustained move below this would expose $2,953 and potentially $2,932 as next supports. The 50-period EMA at $3,075 continues to serve as a dynamic ceiling, suggesting any breakout needs to be confirmed by a close above this zone.
The Relative Strength Index (RSI) is currently at 48, slightly recovering from oversold conditions, and pointing higher—indicating that buyers may be regaining control in the short term. However, the broader trend remains vulnerable until the price decisively reclaims the $3,075 handle.
From a risk-reward standpoint, traders may consider a long position above $2,990, targeting a break toward $3,057, with a protective stop near $2,953. This setup aligns with trendline support and early bullish momentum.
Related News
- EUR/USD Price Analysis – April 09, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.