Gold (XAU/USD) rebounded slightly from a one-and-a-half-week low near the $3,245-$3,246 range during Thursday’s Asian session but remained under pressure for a fourth consecutive day. The recent boost to investor confidence came after a U.S. federal court blocked President Donald Trump’s broad trade tariffs, weighing heavily on safe-haven assets including gold. At the same time, hawkish Federal Open Market Committee (FOMC) minutes released Wednesday bolstered the U.S. dollar, adding downward pressure on the non-yielding yellow metal.
Despite these bearish drivers, ongoing geopolitical tensions and concerns about the deteriorating U.S. fiscal situation keep market nerves elevated, limiting full optimism. Meanwhile, growing consensus that the Federal Reserve will cut interest rates in 2025 poses a headwind for the U.S. dollar, helping gold claw back some intraday losses. Still, the absence of significant buying momentum urges caution before declaring an end to the gold weekly downtrend. Market participants now await key U.S. economic data and Fed commentary for near-term direction.
Market Movers:
A U.S. federal court ruled on Wednesday that President Trump overstepped his authority by imposing sweeping “Liberation Day” tariffs on imports worldwide, effectively blocking the measures from taking effect. The ruling lifted equities sharply on Thursday but pressured traditional safe havens, dragging gold prices lower amid firm U.S. dollar demand.
Stronger-than-expected U.S. economic data this week eased recession fears. Meanwhile, the May FOMC minutes revealed policymakers’ consensus to maintain a wait-and-see stance on rates amid uncertainties related to trade policies and the economic outlook. Fed officials underscored the need to hold interest rates steady until the net effects of recent government policy shifts become clearer, pushing the U.S. Dollar Index (DXY) above the 100 threshold and undermining gold.
On the geopolitical front, the Trump administration reportedly plans to restrict sales of critical U.S. technologies—including semiconductor manufacturing components—and select chemicals to China, sustaining support for gold. Additionally, escalating Middle East tensions, such as Israel’s airstrikes on Houthi targets in Yemen following missile attacks on Israel, and Russia’s proposal to hold peace talks with Ukraine in Istanbul on June 2 under NATO-related conditions, add to risk aversion.
Upcoming Data:
Investors will closely monitor Thursday’s U.S. economic calendar, including preliminary Q1 GDP data, weekly jobless claims, and pending home sales. However, Friday’s Personal Consumption Expenditure (PCE) Price Index remains the focal point for inflation outlook and Fed policy expectations.
Technical Outlook:
Technically, gold’s intraday decline found temporary support near the 50% Fibonacci retracement of its recent recovery from a monthly low. However, Wednesday’s break below a short-term ascending trendline and the 200-period Simple Moving Average (SMA) on the 4-hour chart favors bears. Negative momentum indicators reinforce the downward bias.
Any near-term rebound is likely capped below $3,300, the 200-period SMA resistance on the 4-hour chart. A break above the 23.6% Fibonacci retracement near $3,324-$3,325 could trigger short-covering, pushing gold toward $3,345-$3,350 supply levels.
On the downside, sustained weakness below Thursday’s Asian session low near $3,245 (50% retracement) could invite fresh selling pressure, driving prices toward the 61.8% retracement at $3,215. Further declines might target the psychological $3,200 mark before testing support near $3,180.
