Daily Price Outlook
Gold (XAU/USD) surged to a fresh all-time high during the early European session on Wednesday, reaching above the $3,300 mark.
However, the metal remains well-supported by growing expectations of aggressive policy easing by the Federal Reserve (Fed) and renewed geopolitical risks, particularly from the intensifying US-China trade conflict.
Despite trimming some gains due to overbought technical conditions and profit-taking, the overall sentiment remains bullish for the safe-haven metal.
XAU/USD Rally Fueled by Fed Rate Cut Expectations and Weakening US Dollar
On the other side, the upward rally in gold prices continues to be driven by the market’s firm belief that the Fed will cut interest rates aggressively in 2025, possibly by as much as 100 basis points. This outlook has weakened the US Dollar, which slipped to its lowest level since April 2022 last week.
Hence, the softer greenback boosts demand for gold, as it becomes cheaper for foreign buyers. Investors are now closely watching Fed Chair Jerome Powell’s upcoming remarks, which may offer clearer guidance on the path of interest rates.
Moreover, market confidence in the US economy has been shaken by fears that steep tariffs could lead to a slowdown. This has further fueled speculation that the Fed will need to adopt a more dovish stance to support economic growth, adding upward pressure on gold prices.
US-China Trade War Escalation Lifts Safe-Haven Demand for Gold
Apart from this, the bullish momentum in gold has also been supported by escalating trade tensions between the United States and China.
President Donald Trump recently rolled back some tariff threats temporarily, removing electronics like smartphones and computers from the list.
However, he maintained a 145% tariff on various Chinese goods and announced future levies on semiconductors and pharmaceuticals, keeping uncertainty alive.
Meanwhile, China retaliated by raising tariffs on US imports to 125%, sparking renewed fears of a deepening trade war. This tit-for-tat escalation continues to erode investor confidence in global growth, increasing the appeal of safe-haven assets like gold.
Trump’s unpredictable tariff policy has further added to market anxiety, weighing heavily on the US economic outlook and supporting gold’s upward move.
GOLD (XAU/USD) – Technical Analysis
Gold continues to extend its upward move within a well-defined ascending channel, having broken through short-term resistance at $3,270. The metal is now approaching the next key level at $3,298, a zone that may attract profit-taking after a sharp rally from the $3,215 area earlier this week.
Price structure remains bullish, with higher highs and higher lows intact, and strong buying interest evident on each pullback.
The 50-period Simple Moving Average (SMA), currently at $3,229, supports the trend and confirms buyers remain in control. Price is trading well above this moving average, indicating a short-term overextension, which is also reflected in momentum indicators.
The Relative Strength Index (RSI) is now at 82, signaling overbought conditions — a possible precursor to a temporary pause or minor pullback. However, overbought signals alone are not enough to invalidate a bullish trend, especially in trending markets.
If momentum persists, a clean break above $3,298 could lead to a test of the $3,310 resistance zone, followed by $3,338 as the next upside target. On the other hand, any weakness below $3,270 could prompt a retest of the $3,250 support zone, with deeper downside levels emerging near the SMA around $3,229.
The current structure favors buying on dips as long as price remains above $3,250. Traders should monitor price behavior near resistance, particularly with momentum stretched.
Related News
- GBP/USD Price Analysis – April 16, 2025
JOIN LHFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.