Gold prices continue to be soft as the US Dollar stages a modest recovery from its one-month low, which has dampened the appeal of the precious metal. Renewed trade war concerns, triggered by President Trump’s announcement of emergency tariffs on Colombia, have weighed on risk appetite, providing some support to the safe-haven XAU/USD pair. Meanwhile, expectations of potential Federal Reserve rate cuts and declining US Treasury yields may cap any significant USD gains, limiting further downside for Gold. Traders are closely monitoring key levels around $2,750, with support at $2,736 and resistance near $2,772, to gauge the next directional move amid ongoing market volatility.
KEY LOOKOUTS
• Strength of US Dollar is recovering from one-month low, weighing upon the attractiveness of Gold and market sentiment.
• Trade tensions due to the reinstatement of tariffs on Colombia by Trump may dent risk appetite and see Gold have stronger safe-haven appeal
• Expectations of Federal Reserve rate cuts in 2025 might curb gains in USD and will be highly instrumental in the decision of near-term movement of Gold.
• Monitor Gold’s key support at $2,736 and resistance near $2,772 as breaks could indicate the next significant directional move.
US Dollar recovers modestly and is driven by renewed trade tensions after President Trump announced tariffs on Colombian imports. This has subdued risk appetite and indirectly supported Gold as a safe haven. Meanwhile, market expectations of rate cuts by the Federal Reserve and falling US Treasury yields might cap further upside in the USD, thereby capping further declines in Gold. Traders now await the technical levels, support at $2,736 and resistance at $2,772, and a breach here would set the stage for the next major move in XAU/USD.
The price of gold faces selling pressure from the recovery in USD, driven by renewed trade tensions and tariff announcements. However, Fed rate cut speculations and the slide in US bond yields could limit further declines. The levels to watch include the support at $2,736 and resistance around $2,772.
• Gold prices are pressed by a moderate recovery in the US Dollar from its one-month low.
• Trade war jitters resurfaced through the imposition of tariffs on Colombian imports by Trump. These weigh on market psychology and indirectly support Gold.
• Federal Reserve rate cuts in 2025 limit further strength in USD and thus act as a cushion to Gold prices.
• Resolving US Treasury yields declines also support the safe-haven pair XAU/USD.
• Key support for Gold is near $2,736, and resistance is around $2,772, critical to establishing future price direction.
• Investors continue to be conservative, but remain bullish on Gold given the current economic uncertainty across the world and risk aversion.
• Traders look forward to the US economic reports Durable Goods Orders and Consumer Confidence Index to garner further market direction.
Gold continues to come under pressure as the US Dollar experiences a slight rally and bounces off its one-month low. Renewed trade tensions after President Trump announced emergency tariffs on Colombian imports are heightening concerns about the possibility of a rise in trade wars, and the recovery is being fueled by this. The market sentiment shift has weighed on riskier assets while offering indirect support to Gold as a safe-haven asset. While expectations of two potential Federal Reserve rate cuts by the end of the year and declining US Treasury yields are capping further USD gains, at least keeping a lid on the downside for Gold prices.
XAU/USD Daily Chart
TradingView Prepared by ELLYANA
The price of Gold is trading around $2,750 with critical support levels near $2,736 and resistance around $2,772. This means if there is a breakdown below the support zone, the prices are likely to take further downside motion, possibly up to the mark of $2,700, whereas a breakdown in resistance would be a positive catalyst for its retest around the all-time high near $2,790. Market participants are also focused on key economic data, Durable Goods Orders, and Consumer Confidence Index for other leads on US economic outlook that could influence the prices of Gold. As ongoing global uncertainties prevail, Gold remains an anchor for investors in the shifting risk appetite climate.
TECHNICAL ANALYSIS
Gold is at an important zone and finds strong support around $2,736. Its immediate resistance of importance is $2,772. If it breaks decisively below the level of support, further downward momentum towards $2,700, then likely to the significant support of $2,665-$2,662 is possible. On the other hand, a breakout above the resistance zone might open the gates for a retest of the all-time high near $2,790. The $2,800 mark shall be a very important psychological level. Momentum indicators seem to caution with Gold’s retracement from the recent highs also coinciding with overbought conditions. It is recommended to keep an eye on these levels as they would most likely guide the next directional move for XAU/USD.
FORECAST
The upside remains open for Gold if it is able to push through the $2,772 resistance level. That would more likely be supportive of bullish momentum to drive the prices toward the October high at $2,790 and the psychological barrier at $2,800. Among supporting factors include the expectation that the Federal Reserve may cut its rates, thus weakening the US Dollar, as well as the lower US bond yields that make Gold a more appealing non-yielding asset. Renewed geopolitical tensions or increasing trade war risks can be another factor pushing investors to safe-haven assets, providing additional fuel for a rally in Gold prices.
On the flip side, a sustained break below the support of $2,736 can be used as a possible deeper loss signal for Gold. This is with a test of the $2,700 level, and if selling pressure intensifies, a decline toward the $2,665-$2,662 support area. A stronger US Dollar, in the wake of surprising positive economic data or diminished expectations for Fed rate cuts, may further expedite this downtrend. And diminished trade tensions or improved risk appetite could diminish demand for safe havens, also putting more pressure on the Gold price.
