Gold maintained its positive bias in early European trading on Thursday, staying comfortably above the $3,300 mark. This resilience follows comments by US Treasury Secretary Scott Bessent, who stated that the US-China trade dispute could persist for some time. Coupled with uncertainty surrounding US President Donald Trump’s tariffs and their global economic impact, demand for the safe-haven gold was revived following a two-day corrective dip from the all-time peak.
Additionally, a modest pullback in the US Dollar (USD) and expectations of more aggressive policy easing by the Federal Reserve (Fed) provided further support to the non-yielding gold. While some investors remain hopeful for a US-China trade deal, easing fears about the Fed’s independence have created a generally positive risk tone, which has kept traders from placing new bullish bets on XAU/USD and limited any further price appreciation.
Market Movers: Safe-Haven Demand Resurges Amid Economic and Trade Concerns
Bessent’s comments contradicted reports that the White House was considering reducing tariffs on Chinese imports unilaterally. He emphasized that any tariff reductions would need to be mutually agreed upon, dampening hopes of a swift resolution to the trade standoff and fueling demand for gold as a safe haven.
The Fed’s Beige Book revealed persistent uncertainty over Trump’s shifting tariff policies, which could stifle growth in the coming months. The report also showed mixed consumer spending and signs of a cooling labor market. In addition, a preliminary S&P Global Composite PMI indicated slower US business activity growth in April, with manufacturing expansion slowing and the services sector showing signs of weakening demand.
The US Dollar has retreated from recent gains due to speculation that the Federal Reserve may resume its rate-cutting cycle in June, with at least three cuts expected by year-end. This has benefited gold, though a generally positive risk tone continues to cap further gains in the metal.
Technical Outlook: Key Levels for Gold Price
From a technical perspective, gold has shown resilience near the 38.2% Fibonacci retracement level, following the latest rally from the mid-$2,900s. However, the rally has stalled near the 23.6% Fibonacci level around $3,367-3,368, which is a critical pivot point. Oscillators on the daily chart remain in positive territory, suggesting potential follow-through buying that could push gold toward the $3,400 level. A break above this could lead to gains toward the $3,425-3,427 region, with $3,500 as the next psychological target.
On the downside, the $3,300 mark, followed by support at $3,288 (38.2% Fibonacci) and the swing low near $3,260, will provide key levels of support. A break below these levels could see further downside, targeting the 50% retracement level at $3,225. A deeper pullback below $3,200 would indicate a potential short-term top for gold, extending this week’s retracement slide from the all-time high.
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