Daily Price Outlook
During the early European session on Tuesday, the Gold price (XAU/USD) maintains its firm tone around the $3,225 level, hovering just below the record high set the previous day.
However, the yellow metal continues to draw support from intensifying US-China trade tensions and increasing market speculation that the Federal Reserve will ease monetary policy further in 2025.
Although, the temporary tariff relief offered by the US has kept broader market sentiment steady, preventing aggressive bullish momentum in Gold.
Gold Supported by Escalating US-China Trade Tensions and Safe-Haven Demand
However, the bullish undertone in Gold remains intact as concerns deepen over the rapidly worsening US-China trade war. After President Trump increased tariffs on Chinese products to a record 145%, China responded by raising its own tariffs on US goods up to 125%.
These back-and-forth actions between the two largest economies have made investors nervous about a global economic slowdown. As a result, more people are turning to safe-haven assets like Gold, which has helped keep its price strong.
Despite the temporary exemptions on some electronic products and suggested he might ease tariffs on the auto industry, the overall situation is still uncertain.
He also warned that new tariffs on semiconductors and pharmaceuticals could be coming soon. Because of this ongoing tension between the US and China, investors remain cautious, and this continues to support Gold prices near their all-time highs.
Gold Gains from Fed Rate-Cut Bets and Weak US Dollar Sentiment
Gold also finds tailwinds from growing expectations of aggressive rate cuts by the Federal Reserve. Traders are now pricing in at least three rate cuts in 2025 as fears of a US recession rise.
The US Dollar remains on the back foot as investors bet that softer monetary policy will be required to cushion the economic blow from trade disruptions.
Recent comments from Fed Governor Christopher Waller, who warned that the tariff shock may force the Fed to act, and Atlanta Fed President Raphael Bostic, who noted inflation pressures remain due to tariffs, have reinforced dovish sentiment.
Market focus is now turning to Fed Chair Jerome Powell's speech on Wednesday for clearer policy guidance, which could further shape Gold’s next move.
Traders are watching Tuesday's Empire State Manufacturing Index and upcoming speeches from Fed officials to get a sense of short-term direction. The overall trend is still leaning upward, as concerns and expectations of rate cuts keep Gold in demand, especially with the weaker US dollar.
GOLD (XAU/USD) – Technical Analysis
Gold prices are exhibiting strong bullish momentum after decisively breaking above the $3,168 Fibonacci pivot level, retracing fully from the April 4 dip near $2,956.
The recent breakout above the 1.0 Fibonacci level at $3,168 has been sustained, with prices consolidating in a tight range just below the $3,255 resistance — the 1.414 Fib extension level. This signals a potential continuation toward the 1.618 extension at $3,298, provided the bullish structure remains intact.
Technically, gold remains supported by the upward sloping 50-period SMA, currently at $3,167. This moving average has acted as a dynamic support since the April rebound began, reflecting the persistent demand for the metal amid geopolitical and inflationary concerns.
Meanwhile, the Relative Strength Index (RSI) is hovering near 61, indicating that while bullish momentum is present, the market is not yet in overbought territory, offering room for further upside.
Immediate support is now observed at $3,206 — aligning with recent consolidation lows — followed by stronger buying interest expected near the $3,168 and $3,123 retracement zones. As long as gold holds above the $3,167 stop-loss threshold, the bullish thesis remains valid.
A breakout above $3,255 could trigger momentum toward the $3,283 and $3,298 resistances, with potential for a further extension to $3,338 should bullish sentiment intensify. However, failure to hold above $3,206 would expose gold to a pullback toward the $3,167-$3,123 support cluster.
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