Gold Prices Slip Below Multi-Month High Amid USD Rebound by Amit Gupta, Kedia Advisory
Gold prices ease from a three-month peak, pressured by a modest uptick in the US Dollar and a positive risk sentiment in equity markets. However, expectations of Federal Reserve rate cuts and concerns over President Trump's tariff plans support the precious metal, limiting its downside. Investors eye upcoming US economic data, Fed rate decisions, and geopolitical developments to assess future price direction. Technically, gold remains supported above $2,625, while resistance lies at $2,763-$2,764. A breach above $2,800 could signal further bullish momentum.
Key Highlights
* Gold eases below three-month high due to USD strength and risk-on sentiment.
* Fed rate cut expectations cap USD gains and support gold prices.
* Uncertainty over Trump’s tariff policies keeps gold losses limited.
* Key technical support lies near $2,625; resistance at $2,763-$2,764.
* Upcoming Fed, ECB rate decisions and US data may drive price action.
Gold prices traded with a mild negative bias in early European trading, retreating from the three-month high of $2,764 touched on Wednesday. A modest rebound in the US Dollar, bolstered by an uptick in Treasury yields, undermined the demand for the safe-haven metal. Additionally, the positive sentiment in global equity markets contributed to the pressure on gold prices.
Despite the recent pullback, gold remains supported by market expectations of at least two rate cuts by the Federal Reserve this year, which limits upside momentum for US bond yields and the Greenback. Further, lingering concerns over President Trump's tariff policies and the potential for trade-related volatility help cushion gold's downside.
On the technical front, the $2,625-$2,620 zone provides a strong support base, while $2,763-$2,764 serves as an immediate resistance. A decisive break above this level could set the stage for a retest of the all-time high of $2,790 touched in October 2024. Meanwhile, traders are also watching upcoming Fed and ECB rate decisions, alongside US labor market data, for fresh market cues.
In other developments, the Bank of Japan is expected to announce a rate hike on Friday, adding to the global focus on monetary policy trends. These events, coupled with geopolitical risks, are likely to inject volatility into the gold market in the near term.
Finally
Gold prices face resistance near $2,764, while strong support lies around $2,625. Focus shifts to Fed, ECB rate decisions, and global policy updates to determine future trends.
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