Gold prices (XAU/USD) fell sharply on Thursday, retreating from highs near $3,377-3,378 reached earlier in the day. During the first half of the European trading session, the precious metal dropped to a new daily low. This decline was driven mainly by a slight recovery in the U.S. dollar (USD), which had hit its lowest level since April 22. The stronger dollar pressured gold sellers, causing the intraday sell-off.
Geopolitical Tensions and Trade Uncertainty Support Gold
Despite the pullback, ongoing trade tensions and geopolitical risks continue to provide support for gold as a safe-haven asset. Recent tariff threats by U.S. President Donald Trump have dampened the positive mood created by progress in the U.S.-China trade negotiations.
Meanwhile, expectations that the Federal Reserve (Fed) will lower borrowing costs further in 2025 are expected to limit the dollar’s rise. This, in turn, could prevent gold prices from falling too much, since gold does not yield interest. Investors are now closely watching upcoming U.S. economic data, which could create short-term trading opportunities.
Technical Outlook: Gold Likely to Find Support Near $3,300
From a technical standpoint, gold rebounded from the 200-period simple moving average (SMA) this week. It then broke above the horizontal resistance at $3,348-3,350, signaling strength for bulls. Positive momentum indicators on both daily and hourly charts support a bullish near-term outlook.
If buying continues, gold is expected to climb further toward the psychological $3,400 level. Beyond that, momentum could push prices to the $3,430-3,435 range. Breaking this zone may lead gold to retest historical highs near $3,500, last seen in April.
Support Levels to Watch
On the downside, the $3,348-3,350 area now acts as resistance, helping limit recent losses. Any pullback could offer buying opportunities around $3,322-3,323. Support near $3,300, aligned with the 200-period SMA on the 4-hour chart, is a key level. If gold falls below this, the short-term trend may shift to bearish, favoring sellers
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