Global gold prices remain volatile, shaped by trade agreements, geopolitical risks, and monetary policy expectations. After closing last week at $3,325 per ounce, gold’s direction this week hinges on several critical economic and political factors.
Key Drivers of Gold Prices This Week
US-China Trade Truce Impact
The recent tariff reduction deal between the United States and China has eased market fears, prompting a rebound in gold prices. The agreement slashes tariffs:
From 145% to 30% (US imports)
From 125% to 10% (Chinese imports)
While the initial reaction boosted gold, the lack of concrete implementation details keeps investors cautious. The risk-on mood caps gold’s upside, but any negative developments could quickly reverse this sentiment.
Federal Reserve Rate Cut Expectations
Recent economic data suggests the Federal Reserve may deliver two rate cuts in 2025, down from earlier expectations of three. Traders await comments from Fed Chair Jerome Powell, especially on labor market dynamics and inflation outlook. Dovish remarks could support gold prices by lowering real yields.
Geopolitical Tensions
India-Pakistan tensions have increased safe-haven demand.
Russia-Ukraine conflict is under close watch, with a key diplomatic meeting in Turkey looming.
Any escalation in these areas could reignite strong buying interest in gold.
Key Economic Indicators to Watch
This week, markets will scrutinize:
US Core Producer Price Index (PPI)
Consumer Price Index (CPI)
Both indicators will reveal how recent tariff increases are filtering into inflation data. Soft prints would fuel expectations of monetary easing, supportive for gold.
Technical Outlook for Gold (XAU/USD)
Current Price: $3,325
Immediate Support: $3,300, $3,250, $3,202
Resistance Levels: $3,350, $3,400, $3,450
Gold is currently in a consolidative phase, struggling to decisively break above the $3,350 resistance. Momentum indicators suggest fading bullish strength. A drop below $3,300 could trigger a retest of $3,250 and $3,202. Conversely, a breakout above $3,350 would expose $3,400 and higher targets.
Neutral to bearish bias unless gold breaks above $3,350 convincingly.
Silver Market Outlook
Silver prices are steady near ₹96,700/kg (MCX). Given silver’s strong industrial demand, the trade deal optimism supports its stability. Positive developments in electronics and solar manufacturing sectors could further bolster silver prices.
Gold Price Forecast Summary
| Factor | Impact on Gold | Current Outlook |
|---|---|---|
| US-China Trade Truce | Neutral to Slightly Bearish | Capped upside, cautious optimism |
| Fed Rate Cut Expectations | Bullish if dovish tone | Eyes on Powell’s comments |
| Geopolitical Tensions | Bullish if escalates | Potential safe-haven demand |
| US Inflation Data | Bullish if softer | Key catalyst this week |
| Technicals | Neutral to Bearish | Resistance at $3,350 |
Gold Price Forecast for This Week
Base Case Scenario: Gold consolidates between $3,250 – $3,350
Bullish Breakout Target: $3,400
Bearish Breakdown Target: $3,202, potentially $3,100 if risk appetite persists.
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