Gold (XAU/USD) is consolidating near its all-time high during Thursday’s Asian session, following a sharp rally in the previous day. The metal trades within a narrow range as mixed economic cues and shifting sentiment prevent clear directional momentum.
A stronger-than-expected US Retail Sales report and hawkish remarks from Federal Reserve Chair Jerome Powell on Wednesday provided a modest boost to the US Dollar. This, coupled with a broadly positive tone across equity markets and short-term overbought conditions for gold, has kept fresh buying interest in check.
However, market participants continue to anticipate that the Fed may cut interest rates at least three times before year-end. This dovish outlook, driven by concerns over slowing US economic momentum, limits the potential for further USD gains and lends underlying support to the non-yielding yellow metal.
At the same time, rising geopolitical tensions are bolstering gold’s safe-haven appeal. The intensifying trade war between the US and China—marked by the Trump administration’s 145% tariff hike and China’s 125% retaliation along with restrictions on rare earth exports—has raised fears of a broader economic slowdown. The US also moved to tighten export controls on AI-related technologies, prompting sharp criticism from Beijing.
These trade frictions continue to inject uncertainty into financial markets, making gold an attractive hedge. Additionally, lingering bets on a Fed rate cut as early as June are preventing aggressive moves into the USD, thereby supporting bullion prices.
From a technical standpoint, the daily Relative Strength Index (RSI) remains above 70, indicating overbought conditions. This suggests a period of consolidation or a modest pullback may be necessary before gold resumes its broader uptrend, which has been in place for over four months. Any dips are expected to find solid support around the $3,300 level—a critical pivot point. A decisive break below this threshold could trigger deeper losses.
Looking ahead, traders will monitor upcoming US economic data, including weekly jobless claims, the Philadelphia Fed Manufacturing Index, and housing figures, as well as further comments from Fed officials, for short-term trading cues.
