Gold prices rebounded above the $3,400 level during Asian trading on Thursday, reversing a significant portion of Wednesday’s retreat. The rally was underpinned by a resurgence in safe-haven demand as geopolitical risks re-intensified and markets digested mixed cues from the Federal Reserve’s latest policy stance.
US President Donald Trump added to investor caution after tempering expectations of a swift resolution to the US-China trade dispute, stating he was in “no real hurry” to strike a deal. The lack of progress in trade negotiations, compounded by continued tensions across key geopolitical flashpoints — including the Russia-Ukraine conflict, the Middle East, and military frictions on the India-Pakistan border — supported a bid for safety in gold.
Meanwhile, the initial reaction to the Federal Reserve’s decision to hold interest rates steady between 4.25% and 4.5% faded quickly. While the central bank maintained a hawkish tone, citing elevated uncertainty about the economic outlook, investors appeared unconvinced that rate cuts were off the table. Fed Chair Jerome Powell noted significant ambiguity around trade policies, emphasizing a wait-and-see approach that did little to bolster the US dollar.
The greenback’s inability to build on Wednesday’s modest gains further underpinned demand for gold, despite generally upbeat equity markets. The broader risk-on sentiment may limit upside for the non-yielding asset in the near term, but safe-haven flows remain a key counterbalance.
Market Movers: Key Factors Supporting XAU/USD
US-China Trade War Uncertainty: Trump’s firm stance on maintaining 145% tariffs on China dimmed hopes for imminent progress in trade talks, sustaining demand for gold.
Geopolitical Escalations: Drone attacks in Moscow, guided bombings by Russia post-ceasefire, and Israeli airstrikes disabling Yemen’s Sanaa airport have all heightened global security concerns.
Fed’s Cautious Posture: While maintaining current interest rates, the Fed acknowledged rising economic uncertainty. Powell’s comments on tariff unpredictability signal that policy easing is not off the table.
Trump’s Anticipated Trade Deal Announcement: A potential trade deal announcement, teased by Trump on Truth Social, may temporarily lift equities but could cap gold’s gains if risk appetite surges.
Investors are closely watching Trump’s scheduled press conference at 14:00 GMT, with additional attention on the release of US Weekly Initial Jobless Claims data later in the day. Both events are expected to shape near-term USD and gold price movements.
Technical Outlook: $3,434 Resistance in Focus
From a technical standpoint, fresh buying interest near the $3,260 region — a previous resistance now acting as support — reinforces a bullish outlook. Daily momentum indicators remain in positive territory, suggesting that the path of least resistance is still upward.
A sustained break above the $3,434–$3,435 zone would confirm the bullish bias and open the door for a retest of the all-time high, potentially challenging the psychologically significant $3,500 mark.
Conversely, immediate support lies in the $3,365–$3,360 area, followed by $3,328 and the $3,300 round figure. A decisive break below $3,300 could signal a shift in sentiment, potentially exposing the $3,260 and $3,222 levels, with the latter aligning with last week’s swing low near $3,200.
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