Daily Price Outlook
Gold price (XAU/USD) is trading around the $3,312 level and has faced some challenges in recent trading sessions, with the precious metal struggling to maintain its ground amid growing optimism surrounding US-China trade talks and a strengthening US Dollar.
Despite a slight recovery from the $3,300 mark, Gold remains under pressure, primarily driven by the improving sentiment in global markets and expectations surrounding the Federal Reserve's policy stance.
Gold Price Struggles as US-China Trade Tensions Ease and USD Strengthens
However, the recent bearish bias can be attributed to the easing of trade tensions between the US and China, which has shifted investor sentiment away from safe-haven assets.
China's recent decision to exempt certain US goods from retaliatory tariffs has sparked hope for de-escalation in the trade war between the two largest economies in the world.
This move has contributed to a more positive market mood, with investors growing hopeful that the ongoing tariff disputes may be resolved in the near future.
Moreover, US President Donald Trump’s changing stance on trade policies has created uncertainty, but his comments suggesting the possibility of negotiations with global trade partners have bolstered market optimism. Despite some ambiguity about the specifics of the trade talks, the overall sentiment remains more upbeat, undermining demand for the safe-haven Gold price.
At the same time, the US dollar has regained strength, driven by increased buying interest in the greenback. The dollar's strength has been another hurdle for Gold, as the inverse correlation between the two assets often leads to pressure on Gold when the USD rises.
However, the optimism surrounding US-China trade talks has contributed to the USD's rebound, further diminishing Gold’s appeal.
Fed Policy Outlook and Geopolitical Risks Provide Support to Gold
On the other hand, the possibility of more aggressive policy easing by the Federal Reserve (Fed) could provide some support to Gold. Market expectations for rate cuts have intensified, with traders anticipating at least three rate cuts by the end of the year.
Moreover, Gold traders are awaiting key US macroeconomic data releases, including the Fed's preferred inflation gauge and the Nonfarm Payrolls (NFP) report, which could influence the central bank’s future policy decisions.
These reports may provide fresh insight into the Fed's direction, reinforcing Gold's position if the data supports a dovish stance from the Fed.
In addition to US economic factors, the geopolitical risks continue to loom large, keeping market participants on edge.
The ongoing conflict in Ukraine, with Russian President Vladimir Putin declaring a 72-hour unilateral ceasefire, adds a layer of uncertainty.
However, Ukraine’s rejection of the ceasefire and North Korea's involvement in the war keeps the geopolitical risk premium intact.
These developments maintain a level of support for Gold, as investors hedge against potential global instability.
GOLD (XAU/USD) – Technical Analysis
Gold remains in a broad consolidation phase but is showing early signs of bullish intent. After bouncing near $3,307 support, the price now trades above the 50 SMA ($3,306.41), with $3,319 acting as a key intraday pivot.
The recovery is supported by a series of higher lows and a short-term ascending trendline drawn from the April 23 low near $3,272. This structure reinforces the bullish bias unless $3,273 is breached.
Candlestick analysis reveals a recent bullish engulfing candle followed by a small-bodied Doji near support, suggesting indecision fading in favor of buyers.
Momentum picked up again after this pattern, as the RSI turned higher from midline (now at 55.86), hinting at renewed strength without yet being overbought.
The $3,352 area has acted as a strong intraday resistance, rejecting advances twice. A clear breakout above this level would expose the $3,371 zone, which coincides with the top of a horizontal price channel that’s defined the trading range since mid-April.
Beyond that, $3,387 stands as the next upside target. On the downside, $3,306 remains the first technical floor, followed by $3,273 and $3,246.
The 50 SMA crossover above the price earlier last week suggested short-term bearishness, but the current recovery above that level negates the prior signal.
No bearish divergence is visible on the RSI, and volume has slightly increased on green candles, giving additional weight to bullish momentum.
If gold breaks and sustains above $3,352, the three white soldiers pattern from last week could extend, signaling trend continuation.
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