- Gold price rallies to an all-time peak amid heightened safe-haven demand on the back of Trump’s reciprocal tariffs.
- Bulls, however, pause for a breather and opt to take some profits off the table amid bearish divergence on RSI.
- Fed rate cut bets and slumping US bond yields drag the USD to a fresh YTD low, which should support the XAU/USD.
Gold price (XAU/USD) struggles to capitalize on its Asian session spike and retreats after hitting a fresh all-time high in reaction to US President Donald Trump’s reciprocal tariffs announcement. Slightly overbought conditions on the daily chart prompt bulls to take some profits off the table, which, in turn, is seen as a key factor behind the intraday pullback. Any meaningful downside, however, seems elusive in the wake of concerns about global economic growth and a recession in the US.
Meanwhile, the US Dollar (USD) selling bias remains unabated in the wake of rising bets that a slowdown in the US economy would force the Federal Reserve (Fed) to resume its rate-cutting cycle soon. This, along with the anti-risk flow, keeps the US Treasury bond yields depressed near a multi-month low and should contribute to limiting losses for the non-yielding Gold price. Hence, any subsequent slide might be seen as a buying opportunity and is more likely to remain cushioned amid the risk-off mood.
Daily Digest Market Movers: Gold price bulls turn cautious near record high; downside seems limited amid heightened safe-haven demand
- US President Donald Trump imposed a 10% baseline tariff on all imports and higher duties on some of the country’s biggest trading partners, sending shockwaves through global financial markets. In response, China’s Commerce Ministry stated that it will resolutely take countermeasures to safeguard its rights and interests.
- The developments raise the risk of a widening trade war, which could upset global free trade and impact negatively on the world economy. This, in turn, boosted demand for traditional safe-haven assets. Apart from this, the emergence of heavy US Dollar selling pushes the Gold price to a fresh record high on Thursday.
- Investors now seem worried that Trump’s protectionist policies could potentially send the US economy into a recession and are pricing in a 70% chance that the Federal Reserve (Fed) will lower borrowing costs in June. Moreover, the anti-risk flow drags the US Treasury bond yields lower across the board, undermining the USD.
- On the economic data front, the US ADP reported on Wednesday that private-sector employers added 155K jobs in March – far more than the 105K expected and the previous month’s revised reading of 84K. This, however, did little to impress the USD bulls amid concerns about the economic fallout from Trump’s trade policies.
- Traders now look forward to the US economic docket – the release of the usual Weekly Jobless Claims and the US ISM Services PMI. Apart from this, trade-related headlines might influence the USD and provide some impetus to the XAU/USD pair ahead of the closely-watched US Nonfarm Payrolls (NFP) report on Friday.
Gold price technical setup supports prospects for the emergence of dip-buying; the $3,100 mark holds the key for bullish traders
From a technical perspective, the Relative Strength Index (RSI) on the daily chart continues to flash overbought conditions and holds back the XAU/USD bulls from placing fresh bets. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for an extension of a multi-month-old strong uptrend. Nevertheless, the broader setup seems tilted firmly in favor of bullish traders and suggests that the path of least resistance for the Gold price remains to the upside.
Hence, any corrective slide below the Asian session low, around the $3,123 area, could be seen as a buying opportunity. This, in turn, should help limit the downside for the XAU/USD pair near the $3,100 mark, which should now act as a key pivotal point. A convincing break below, however, might prompt some long-unwinding and drag the Gold price to the $3,076 area, or the weekly swing low touched on Monday, en route to the $3,057-3,058 region, the $3,036-3,035 zone and the $3,000 psychological mark.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.86% | -0.40% | -1.53% | -0.14% | -0.02% | -0.30% | -1.08% | |
| EUR | 0.86% | 0.20% | -0.68% | 0.75% | 0.88% | 0.57% | -0.21% | |
| GBP | 0.40% | -0.20% | -0.87% | 0.54% | 0.68% | 0.38% | -0.44% | |
| JPY | 1.53% | 0.68% | 0.87% | 1.38% | 1.56% | 1.11% | 0.43% | |
| CAD | 0.14% | -0.75% | -0.54% | -1.38% | 0.21% | -0.18% | -0.98% | |
| AUD | 0.02% | -0.88% | -0.68% | -1.56% | -0.21% | -0.29% | -1.08% | |
| NZD | 0.30% | -0.57% | -0.38% | -1.11% | 0.18% | 0.29% | -0.82% | |
| CHF | 1.08% | 0.21% | 0.44% | -0.43% | 0.98% | 1.08% | 0.82% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
