Gold prices (XAU/USD) showed signs of recovery during Tuesday’s Asian session, halting a three-day losing streak as the US Dollar (USD) faltered. Despite recent USD gains from a multi-month low, the greenback retreated slightly from a three-week high touched on Monday. This shift, along with growing expectations that the Federal Reserve (Fed) will soon resume its rate-cutting cycle due to concerns over a potential tariff-driven US economic slowdown, has provided support to the non-yielding precious metal.
Global risk sentiment remains stable, buoyed by optimism surrounding US trade tariffs, progress in the Russia-Ukraine peace talks, and potential stimulus measures from China. These factors have helped curb excessive bullish momentum for gold, though the overall outlook suggests a continued upward bias for XAU/USD. Any short-term pullback could be viewed as a buying opportunity, with gold finding support amid the broader fundamental backdrop.
Market Movers & Key Factors Affecting Gold
The US Dollar faced pressure following the release of a stronger-than-expected US Composite PMI for March, which rose to 53.5 from 51.6 the previous month. The Fed’s recent decision to lower its 2025 growth forecast while raising its inflation outlook, alongside indications that the central bank might cut rates twice in 2025, has kept USD gains in check. This environment has provided additional tailwinds for gold prices.
As the US prepares to implement reciprocal tariffs starting on April 2, there are hopes that these measures will be less severe than initially feared. Additionally, reports that the US and Russia are working toward a maritime ceasefire deal in the Black Sea have further contributed to global risk sentiment. In China, news that the government is considering including services in a subsidy program to stimulate consumption has boosted investor confidence and pressured gold prices as a safe-haven asset.
Technical Outlook for Gold
From a technical standpoint, gold has shown resilience near the $3,000 psychological level. This area is seen as a key support zone, and a decisive break below it could trigger technical selling, potentially pushing prices down to the $2,978-$2,982 range. Further declines could test the $2,954-$2,956 support level.
On the upside, gold faces immediate resistance around the $3,033 mark, with a potential challenge to last week’s all-time high near $3,058. Positive momentum on daily oscillators suggests that if gold prices manage to break through this resistance, the multi-month bullish trend could extend further.
As traders await US economic data, including the Conference Board’s Consumer Confidence Index and the Richmond Manufacturing Index, focus will remain on the US Personal Consumption Expenditure (PCE) Price Index later this week, which could offer fresh insights into the Fed’s rate-cut strategy.
