Gold prices are staging a modest recovery above the $3,350 mark in early Asian trading on Wednesday, as traders eagerly await key U.S. data releases and speeches from Federal Reserve (Fed) officials that could provide direction for a sustained move higher.
Gold Looks to US Data for Further Gains
After retreating from a monthly high of $3,392 on Tuesday, gold is regaining some ground amid renewed weakness in the US Dollar (USD), as concerns over trade tensions resurface.
The Trump administration’s deadline for its trading partners to submit their best offers on trade is set for Wednesday. Additionally, the doubling of levies on imported steel and aluminum to 50% will take effect at 4 GMT. These developments are keeping markets on edge, especially ahead of talks between US President Donald Trump and Chinese President Xi Jinping scheduled for Friday. The growing trade uncertainty has added pressure to the USD, potentially offering a brief boost to gold prices.
Adding to the complexity, FBI Director Kash Patel recently confirmed via a post on X (formerly Twitter) the arrest of two Chinese nationals charged with attempting to smuggle bioterror fungus into the US. This further stirs geopolitical tensions, adding to the risk premium supporting safe-haven gold.
Last week, both the U.S. and China accused each other of violating the terms of a May agreement to lower certain tariffs, adding to the trade uncertainty.
As these developments unfold, the USD-denominated gold could see a brief surge due to the greenback’s fresh leg down, especially with the steel and aluminum tariffs coming into play.
Attention will soon shift to crucial US economic data—ADP Employment Change and ISM Services PMI—scheduled for later today. These figures will provide insights into the US labor market and the overall economic health, potentially guiding market expectations for the Fed’s next policy decision and impacting the USD’s outlook.
On Tuesday, the USD gained some support from stronger-than-expected JOLTS Job Openings data. The number of job openings for April stood at 7.39 million, surpassing expectations of 7.1 million and the 7.2 million openings recorded in March. This suggests ongoing tightness in the U.S. labor market, a key metric closely watched by the Fed.
Gold Price Technical Analysis: Daily Chart
The short-term technical outlook remains positive for gold, as long as the confluence of the 21-day Simple Moving Average (SMA) and the 38.2% Fibonacci Retracement of the April rally (around $3,297) holds as support.
The 14-day Relative Strength Index (RSI) is pointing upward, comfortably above the neutral 50 level, signaling continued buying momentum.
For gold to maintain its bullish bias, buyers need to clear the 23.6% Fibonacci resistance at $3,377 on a daily closing basis. A break above this level would likely pave the way for a continuation of the upward trend toward lifetime highs near $3,500.
The next significant resistance level lies at the May high of $3,439, which must be taken out to confirm the resumption of the rally.
Gold price recently broke through the falling trendline resistance near $3,346, closing Monday at $3,382. This suggests that the short-term outlook is skewed toward further gains, provided the price stays above this trendline.
On the downside, should sellers take control, a break below the trendline support at $3,325 could lead to a deeper pullback. The next support level would be the powerful confluence at $3,297, which includes the 38.2% Fibonacci level and the 21-day SMA.
The last line of defense for buyers is near $3,240, where the 50% Fibonacci retracement and the 50-day SMA converge.
Conclusion
Gold is battling key resistance levels as traders await critical U.S. economic data and developments in trade talks. The interplay of geopolitical risks, Fed policy expectations, and economic data will likely drive the next phase of gold’s price action.
For now, gold remains in a constructive technical setup, with the key resistance at $3,377 and $3,439, while support holds near $3,325 and $3,297.
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