Gold prices (XAU/USD) recovered from early losses to trade around $3,361 in early European trading on Thursday. A modest rebound in the U.S. dollar (USD) limited gold’s upside. At the same time, worries about U.S. fiscal health and expectations that the Federal Reserve (Fed) will cut borrowing costs further in 2025 kept downward pressure on the dollar. This divergence gave some support to non-yielding gold.
Geopolitical Risks Keep Investors on Edge
Ongoing geopolitical tensions and trade-related uncertainties also helped prevent a steeper decline in gold. Markets are awaiting a possible summit between U.S. President Donald Trump and Chinese President Xi Jinping. If the meeting raises fresh concerns over trade or global stability, traders will likely buy gold as a safe-haven asset. However, many investors are reluctant to push gold much higher before seeing how Friday’s U.S. non-farm payrolls (NFP) report affects the overall picture.
Technical Outlook: Key Levels to Watch
From a technical standpoint, analysts point to the $3,324–$3,326 range as an important barrier. Gold broke above this zone earlier in the week, signaling a potential shift to the upside. Both daily and hourly indicators remain in positive territory, suggesting further gains could be on the horizon.
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To confirm a bullish breakout, gold needs a decisive move above $3,385—the multi-week high reached on Tuesday.
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If buyers drive prices past that level, the next upside targets are $3,400 and then $3,433–$3,435.
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A sustained rally could eventually push gold toward $3,500, approaching its all-time highs set in April.
On the flip side, immediate support lies near $3,355. Any dip toward this level might attract buyers. However, if sellers gain momentum and gold drops below $3,300, the next floor to watch is $3,286–$3,285.
Traders Await Fresh Momentum
In the short term, it may be prudent for bullish traders to wait for clear follow-through buying above $3,385 before adding exposure. If that level holds and gold breaks higher, the path toward $3,400 and beyond could open up. Conversely, a failure to hold $3,355 risks pushing prices back toward recent supports. With Friday’s NFP data around the corner and geopolitical developments looming, markets may remain range-bound until fresh catalysts emerge.
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