Gold fails to hold gains despite falling US Treasury yields and softer DXY.
Trump’s refusal to lift China tariffs without concessions sours market mood.
Traders brace for heavy US data week including GDP, ISM and Nonfarm Payrolls.
Gold price made a U-turn and erased Thursday’s gains, falling below the $3,300 mark as the Greenback remained bid and Bullion failed to capitalize on falling US Treasury yields. A de-escalation of the trade war between the US and China sponsored a leg-down in the precious metal, which exchanged hands at $3,294, losing over 1.60%.
Markets remain volatile as sentiment swings between risk-on and risk-off due to comments made by US President Donald Trump. Earlier, Bloomberg revealed that China wants to exempt some US products from tariffs. Traders reacted positively to the news, but later Trump said he “won’t remove China tariffs unless they give us something.”
Sentiment went sour, and even though the Greenback paired some of its gains with the US Dollar Index (DXY) edging down, it remains up 0.23% at 99.51. This prevents Gold from recovering some ground, and it seems traders were caught off guard after booking profits ahead of the weekend.
US Consumer Sentiment worsened in April, according to the University of Michigan (UoM), which reported the fourth lowest reading since the late 1970s.
Next week, traders are eyeing the release of the US JOLTS report for March, the first reading of Q1 2025 Gross Domestic Product (GDP), the ISM Manufacturing PMI, and April’s Nonfarm Payrolls figures.
Regarding the chances of the Fed reducing interest rates at the upcoming meeting, traders see a 92% chance of keeping them unchanged, according to Prime Market Terminal. Nevertheless, traders expect the fed funds rate to end the year at 3.45%, equal to 86 basis points of easing (bps).
Source: Prime Market Terminal
Daily digest market movers: Gold price falls as the Greenback stages a comeback
The yield on the US 10-year Treasury note has dropped five basis points, reaching 4.266%.
US real yields collapsed four and a half bps to 1.968%, as shown by the US 10-year Treasury Inflation-Protected Securities yields.
The University of Michigan (UoM) Consumer Sentiment in April dipped from 57 to 52. Consumers’ inflation expectations for one year rose from 5% to 6.5% and a five-year increase of 4.4% from 4.1%.
On Thursday, Cleveland Fed President Beth Hammack stated the Fed could act as soon as June if the data supports it but emphasized that uncertainty is weighing on business planning.
XAU/USD technical outlook: Remains bullish but poised to test $3,200
Gold’s uptrend remains intact, though the precious metal drifts below $3,300 due to buyers' lack of commitment to pushing prices above $3,400. Also, the Relative Strength Index (RSI) shows buyers’ momentum is fading. This clears the path for sellers to push XAU/USD lower.
The first support would be $3,250. A breach of the latter will expose the April 3 peak of $3,167 and the 50-day Simple Moving Average (SMA) at $3,041.
Conversely, if buyers reclaim $3,300, the next key resistance would be the April 22 high of $3,386 to prevent sellers from dragging down prices. The next key resistance level would be $3,400, followed by the $3,450 and the $3,500 figures.
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