The gold price (XAU/USD) regained positive momentum in the Asian trading session, recovering some of the losses from the previous day’s near four – week high, and is currently trading above $3,358. This rebound is fueled by multiple factors, including rising expectations of Federal Reserve interest rate cuts, which limit the strength of the US dollar’s rebound, and the expansion of the US fiscal deficit, which brings about risk – averse sentiment.
Market Drivers and Safe – Haven Role
Global trade tensions have flared up again, providing gold with a safe – haven role. The JOLTS job vacancies in the US for April, released on Tuesday, recorded 7.39 million, higher than the previous value of 7.2 million and the expected 7.1 million. Despite this strong data, the market’s expectation that the Federal Reserve will cut interest rates twice within the year remains intact, mainly due to continuous signals of inflation easing.
“Although the data is strong, the inflation trend that the Federal Reserve is concerned about still points to the space for interest rate cuts, especially against the backdrop of current fiscal expansion and trade shocks,” according to market research experts.
Tariff Policy and Market Impact
Trump’s new round of steel and aluminum tariff policy, which officially came into effect on Wednesday with the tax rate raised from 25% to 50%, has once again pushed “trade concerns” to the forefront of the market.
Federal Reserve Officials’ Cautious Signals
Against this backdrop, several Federal Reserve officials have sent out cautious signals. Atlanta Fed President Bostic said, “We still need to be patient. We cannot rush to cut interest rates at present.” Chicago Fed President Goulsby said, “The economic slowdown brought about by tariffs may be reflected later. Currently, employment is stable, and it is necessary to continue to observe whether there is a risk of stagflation.” Federal Reserve Governor Tim Cook said, “The impact of trade policy on the economy has emerged and may boost inflation and weaken economic growth.”
Technical Analysis of Gold Prices
These remarks strengthened market expectations for a loose monetary policy outlook, putting pressure on the US dollar and further supporting the rise in gold prices. Technically, the gold price successfully broke through the key resistance range of $3,324 – $3,326 this week, indicating that the bull structure has been strengthened. After a pullback to the vicinity of this area on Wednesday, it quickly gained buying support, verifying that this level had transformed from “resistance” to “support.”
On the daily chart, the MACD indicator remains in positive operation, the moving average system shows a bullish alignment, and the short – term target level has pointed to $3,380. If the gold price breaks through this level, it may test the $3,400 mark and even have a chance to return to the historical high of around $3,500 set in April.
The key support level below is at $3,355. If this level is broken, it may decline to the range of $3,324 – $3,326, with further support levels around $3,300 and $3,285. The short – term market is still in a strong consolidation pattern.
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