- Gold trades near $3,400 amid safe-haven demand and a weaker USD.
- Trump tempers U.S.-China trade optimism by refusing tariff concessions.
- Geopolitical risks rise with new developments in Ukraine, Russia, Yemen, and South Asia. The Fed holds rates steady, adopts a cautious stance on economic outlook.
The gold forecast is strongly bullish as the price edged close to a 2-week top amid geopolitical developments and US macro data. The precious metal continued its rally beyond $3,400 on Thursday. A weaker dollar and lingering trade uncertainties keep the gold price underpinned.
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The US President Trump signaled no urgency in resolving US-China trade conflict which turned investor sentiment cautious. He stated that he’s not open to reduce the current tariff of 145% on Chinese imports. These remarks dampened the trade deal optimism and reignited the safe-haven demand for gold.
Moreover, risk aversion stemming from geopolitical tensions has also taken center stage. Ukrainian drone strikes on Moscow, just hours before Russia’s announcement of ceasefire. Later, Ukraine accused Russia of violating truce with guided bombs. Simultaneously, tension in the Middle East regarding Israel’s attack on Yemen’s main airport and Houthis’ potential retaliation has soured the global risk sentiment. Moreover, India-Pakistan tension at border also keeps geopolitical risk elevated.
At monetary policy arena, the Federal Reserve kept interest rates unchanged at 4.25% – 4.50% during policy meeting on Wednesday. Fed Chair Jerome Powell noted enhanced economic uncertainty due to tariff policies. He indicated that the central bank will adopt wait and watch approach rather than cutting rates in near term. Though Fed’s tone was cautious, it couldn’t ignite buying in US dollar which served as another catalyst for gold’s rally.
However, gold lacks aggressively bullish bets as equities found support amid Trump’s recent announcement of a major trade agreement with China. During his press conference, he said he would reveal the deal involving a highly respected country.
Key Events for Gold
- Trump’s announcement regarding trade agreement
- US initial jobless claims
Gold Technical Forecast: Bulls fail to sustain $3,400
The 4-hour gold chart shows a strong pullback from above the $3,400 level. This is the second attempt that failed to sustain above the $3,400 area. However, the technical indicators are still bullish for the metal. The RSI is above 50.0 and the price is well above 30-period SMA.
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Further selling momentum can lead the price towards $3,330 ahead of $3,300. On the upside, a major hurdle lies at $3,407, ahead of the all-time high at $3,500.
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