Gold Price Plunges Below $3,300 Due to Trade Tensions and Resilient US Dollar
Gold prices plummeted below the $3,300 level as escalated trade tensions between the US and China, combined with a strong US Dollar, weighed down market sentiment. In spite of declining US Treasury yields and weaker DXY movements, bullion could not sustain its latest gains, falling more than 1.60% to about $3,294. Uncertainty increased after President Trump declined to roll back tariffs on China unless more concessions were made, going back on previous optimism. Simultaneously, weaker US consumer sentiment and a jittery economic outlook prior to important data releases — such as GDP, ISM Manufacturing PMI, and Nonfarm Payrolls — kept traders on their toes. Technically, Gold is still in an uptrend but stands at risk of further corrections if major support levels are breached. KEY LOOKOUTS • Gold may test near-term support at $3,250; a breakdown can lead the way to $3,167 and the 50-day SMA of $3,041. • Traders will be keenly observing the US JOLTS report, Q1 GDP, ISM Manufacturing PMI, and April’s Nonfarm Payrolls for new market guidance. • While the Fed is likely to keep rates unchanged in the next meeting, traders are factoring in 86 basis points of rate cuts by the end of the year. • Market mood remains extremely sensitive to any fresh updates in the US-China trade negotiations, particularly after Trump’s recent tariff comments. Traders would need to watch Gold closely near the $3,250 support level, and a breakdown below it may trigger further declines toward $3,167 and the 50-day Simple Moving Average (SMA) at $3,041. Focus will also be on significant US economic releases next week, such as the JOLTS report, Q1 GDP numbers, ISM Manufacturing PMI, and April’s Nonfarm Payrolls, which can have a substantial impact on market sentiment. On the monetary policy side, although the Federal Reserve is generally expected to leave interest rates unchanged at the next meeting, markets continue to price in approximately 86 basis points of rate cuts through the end of 2025. Furthermore, US-China trade negotiations will continue to be a key driver for risk sentiment, after President Trump’s insistence on keeping tariffs in place without additional Chinese concessions. Gold traders closely monitor the $3,250 support level, with further losses likely if broken. Major US data such as GDP, ISM PMI, and Nonfarm Payrolls will be major drivers of market action next week. Trade tensions and Fed rate expectations will continue to be heavy-handed influences as well. • Gold continues under pressure due to changing market sentiment amid US-China trade tensions. • President Trump’s resolve on keeping tariffs without Chinese concessions has unnerved markets. • US Dollar strength remains a drag on investor demand for Gold. • Markets are gearing up for a hectic week as major US economic data releases, including Q1 GDP and Nonfarm Payrolls, are coming up. • US consumer sentiment declined in April, reaching one of the lowest points in the post-1970s period. • Even with declining US Treasury yields, Gold did not see substantial safe-haven demand. • Federal Reserve policy expectations continue to be in the spotlight, with markets factoring in possible rate cuts later this year. Gold continues to be under pressure as market sentiment oscillates between optimism and caution, largely influenced by the continuing trade tensions between the United States and China. Hopes for de-escalation were smothered after President Trump indicated that tariffs on Chinese imports would not come down without additional concessions, backtracking on previous positive signals from Beijing. That change in tone has kept traders cautious and added to an overall risk-averse market backdrop as the markets approach a hectic week of economic data. XAU/USD DAILY CHART PRICE CHART SOURCE: TradingView Over the next several days, investors will be paying attention to major US releases such as the JOLTS job openings, initial Q1 GDP reading, ISM Manufacturing PMI, and April’s Nonfarm Payrolls. These releases will be looked to as offering essential information on the condition of the US economy and guiding expectations around future Federal Reserve policy actions. Concurrently, general global market uncertainty and US-China developments will be influencing overall risk appetite as well. TECHNICAL ANALYSIS The wider gold uptrend holds, yet the failure to maintain gains over the $3,300 mark indicates diminishing bullish momentum. The waning strength is mirrored in the Relative Strength Index (RSI), where the evidence points toward declining control by the buyers on the short-term side. With further selling pressure, the next significant support level is at $3,250, and then lower levels towards $3,167 and the 50-day Simple Moving Average (SMA) level of $3,041. On the positive side, a bounce above $3,300 may attract new buying interest, with near-term resistance at $3,386, and additional barriers at $3,400 and $3,450. FORECAST Gold is able to regain strength and retake the $3,300 level, it may pave the way for a new rally. The first strong resistance level to watch is $3,386, last month’s high set on April 22. A decisive penetration of this figure might tempt bulls to drive the prices to the psychological level at $3,400. Thereafter, potential targets are at $3,450 and $3,500 eventually, where firmer selling interest may become more active again. Renewed risk-off tone, soft US economic reports, or a pullback in the US Dollar would drive this upside action. Conversely, inability to sustain above $3,300 would leave Gold open to more weakness. Initial support is at $3,250, a price that if violated, may unleash a more extensive correction to $3,167. A breakout below this may even challenge the 50-day Simple Moving Average (SMA) of $3,041. Further US Dollar strength, supportive US economic statistics, or improving geopolitical tensions might put pressure on Gold and exert downward pressure on prices in the short term.
