Daily Price Outlook
Gold prices (XAU/USD) have extended their decline after failing to hold above the psychological $3,500 mark—a fresh record high.
The precious metal has now fallen for a second consecutive day, retreating to around the $3,300 level amid waning safe-haven demand and shifting market dynamics.
Gold Price Faces Pressure from Easing Geopolitical Tensions
However, the major factor behind the recent decline in gold prices is the easing of geopolitical tensions. US President Donald Trump’s administration hinted at the possibility of de-escalating the trade dispute with China, which has been a major driver of global uncertainty.
Meanwhile, Trump backtracked on his threats to dismiss Federal Reserve (Fed) Chair Jerome Powell, signaling a more stable political outlook.
These moves helped ease market concerns, boosting investor confidence and diminishing gold's appeal as a safe-haven asset.
Apart from this, the upbeat comments from Trump’s administration officials regarding the US-China trade talks, along with Russian President Vladimir Putin’s positive stance on peace initiatives in Ukraine, have helped calm global tensions.
These developments have resulted in profit-taking in gold, following its recent record highs, as investors shifted to riskier assets.
Gold Prices Weighed Down by USD Recovery and Fed's Rate Cut Speculation
On the US front, the broad-based US dollar maintained its bullish trend and remained strong. Although, the gains could be fade due to ongoing concerns about the US economy and rising expectations that the Federal Reserve may ease policy aggressively.
Many investors now believe the Fed could restart its rate-cutting cycle in June, with some even expecting at least three rate cuts by the end of the year.
Furthermore, the market's focus has shifted to the upcoming release of global flash PMIs, which are expected to provide fresh insights into global economic health and influence investor sentiment further. If the data signals weaker economic conditions, gold may see renewed support, even as geopolitical tensions ease.
Investor Caution as Geopolitical Risks Fade and Fed Actions Loom
Despite the recent slide in gold, investors remain cautious about declaring the end of gold’s upward trend. The ongoing speculation surrounding the Fed’s potential rate cuts continues to support gold’s allure. Moreover, while easing geopolitical tensions have contributed to the retreat, concerns about the health of the global economy and the Fed's actions could offer a potential tailwind for the precious metal.
GOLD (XAU/USD) – Technical Analysis
Gold has broken below its rising channel and is showing signs of trend exhaustion after failing to hold above the $3,370 support zone. The recent break under both the ascending channel support and the 50-period SMA ($3,368) confirms a short-term bearish shift. Price action is now targeting the next support area around $3,273, provided the bearish pressure sustains.
The rejection near $3,453 followed by consecutive bearish candlesticks points to a strong reversal pattern. This is further supported by a drop in the RSI, now at 36.00, which reflects increasing downside momentum and puts buyers on the defensive.
Sellers are likely to remain in control below $3,370. A daily close beneath this threshold confirms the breakdown. The next area of interest for sellers is the $3,273 support, while any recovery above $3,433 would invalidate the short setup and suggest bullish reentry.
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