Gold gave up a significant portion of its early gains on Thursday, retreating from an intraday high near $3,415 to trade at the lower end of its daily range. Despite the pullback, the downside appears limited due to prevailing geopolitical risks and market caution ahead of key political events.
The retreat in gold prices follows a hawkish pause by the Federal Reserve, which opted to maintain interest rates within the 4.25%–4.5% range at the conclusion of its two-day policy meeting. The decision helped sustain elevated U.S. Treasury yields and supported the U.S. dollar, weighing on the non-yielding precious metal. Nevertheless, ongoing uncertainty and risk-sensitive market behavior suggest investors may remain hesitant to initiate aggressive selling.
Investor sentiment was further impacted by comments from former U.S. President Donald Trump, who downplayed the urgency of a resolution to the U.S.-China trade dispute. Trump stated that he was not inclined to reduce the 145% tariffs imposed on Chinese goods, tempering optimism surrounding planned trade negotiations.
Geopolitical developments continue to bolster gold’s safe-haven appeal. Moscow’s airports were temporarily shut down amid a significant Ukrainian drone offensive, which preceded a three-day ceasefire announced by Russian President Vladimir Putin. Despite the ceasefire, Ukraine reported Russian airstrikes just hours after the truce took effect.
Meanwhile, tensions in the Middle East escalated as Israel’s military claimed to have disabled Yemen’s main airport in Sanaa, controlled by the Houthi faction. In response, a senior Houthi official warned of retaliatory action, keeping regional risks elevated.
While the Federal Reserve acknowledged growing economic uncertainty in its post-meeting statement, Fed Chair Jerome Powell signaled no immediate shift in monetary policy. Powell emphasized the need for clarity, particularly regarding tariff developments, suggesting that rate cuts are not imminent—though his comments did little to boost the dollar.
Trump, via a post on Truth Social, also teased the announcement of a significant trade agreement with a “highly respected country,” scheduled for Thursday. The announcement, expected at 14:00 GMT during a press conference at the Oval Office, is likely to shape risk sentiment and impact precious metal markets.
In the short term, gold could remain supported by dip-buying near technical levels around $3,365–$3,360, previously acting as resistance and now functioning as support. Daily chart indicators remain in bullish territory, pointing to a favorable technical setup for further upside. A sustained move above the weekly high of $3,434–$3,435 could open the door to retesting the all-time high and potentially reaching the key psychological barrier at $3,500.
On the downside, immediate support lies near $3,465–$3,460, with additional demand expected around $3,328–$3,327 and the $3,300 mark. A decisive break below this zone could undermine bullish momentum and trigger further declines toward $3,265–$3,260 and possibly $3,223–$3,222—last week’s swing low around $3,200.
Markets will also be closely watching the release of U.S. Weekly Initial Jobless Claims later in the day for further cues on the dollar and gold price direction.
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