- Gold prices dipped as easing U.S.-China trade tensions and a firmer dollar reduced safe-haven demand.
- Traders now eye key U.S. economic data, with a break below $3164 potentially triggering deeper losses.
Gold prices extended their decline on Tuesday, pressured by growing optimism around U.S.-China trade negotiations and a modest rebound in the U.S. dollar. These factors have significantly curbed safe-haven demand, placing the yellow metal in a tight holding pattern as traders await clearer signals from upcoming economic data.
At 12:03 GMT, spot gold (XAU/USD) was trading at $3307.66, down $36.21 or -1.08%, reflecting a continuation of the bearish momentum seen in recent sessions.
The metal remains rangebound between key resistance at $3380.20—coinciding with the 50% Fibonacci retracement level—and strong support at $3228.38. A sustained breakout beyond either level could define gold’s next major move. However, if prices break below $3164.23, bears may push toward the 50-day moving average at $3067.67, a level that has offered reliable support since early January.
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Much of gold’s recent weakness stems from improving global trade sentiment. U.S. Treasury Secretary Scott Bessent noted that multiple countries, including India and Japan, have made significant strides to prevent further tariffs. Meanwhile, China’s decision to exempt certain U.S. goods from retaliatory tariffs further underscored a tone of de-escalation—reducing demand for gold’s safe-haven appeal.
Adding to the downside pressure is a slight recovery in the U.S. dollar. As risk appetite improves, traders have rotated away from defensive assets, weighing further on bullion. Market participants are now eyeing key U.S. economic indicators, including the PCE price index and Friday’s non-farm payrolls report, for clues on the Federal Reserve’s policy trajectory. A hawkish signal could keep gold on the defensive.
Still, physical demand from China remains a bright spot. Hong Kong customs data showed a 41.9% month-on-month surge in gold imports in March, underscoring underlying consumer demand.
Despite strong long-term fundamentals, gold’s short-term outlook remains bearish. With support vulnerable and resistance holding firm, a break below $3164 could accelerate losses toward $3067. Unless bulls can reclaim ground above $3380, any rallies are likely to face renewed selling.
