Gold prices (XAU/USD) are slightly up in early European trading on Tuesday, ending a three-day losing streak. The US Dollar (USD) struggles to hold its recent recovery from a multi-month low, staying near a three-week high. Traders expect the Federal Reserve (Fed) to cut interest rates soon, which helps gold stay strong. Worries about a slowdown in the US economy due to tariffs also add to gold’s appeal as a safe-haven asset.
At the same time, hopes for softer US trade tariffs, progress in Russia-Ukraine peace talks, and China’s economic support measures improve market sentiment. This could prevent traders from aggressively buying gold, limiting its upside. However, the overall outlook suggests that gold may continue to rise, and any dips could be seen as buying opportunities.
Key Points for Gold Price:
- Gold price remains above $3,000, supported by Fed rate cut expectations.
- The US Dollar struggles to maintain its recent gains, benefiting gold.
- Optimism over US trade tariffs, Russia-Ukraine talks, and China’s stimulus boosts market confidence.
- The Federal Reserve’s policy outlook and economic data releases remain key factors for gold’s movement.
- Gold’s technical setup suggests that dips could be buying opportunities, with resistance at $3,033 and $3,057.
Key Market Updates: Federal Reserve rate cuts and Weak USD Support Gold
- Traders believe that President Donald Trump’s planned tariffs, set for April 2, will be less harsh than feared, boosting market confidence.
- Russian media reports that the US and Russia will issue a joint statement after peace talks in Saudi Arabia about a Black Sea ceasefire.
- A Financial Times report says China might include services in its stimulus plan to boost spending, making gold less attractive as a safe-haven asset.
- The US Dollar drops from a near three-week high after better-than-expected US Composite PMI data, which rose to 53.5 in March from 51.6.
- The Federal Reserve lowered its 2025 growth forecast but raised its inflation outlook, keeping plans for two rate cuts this year.
- Concerns about slower US economic growth have raised expectations that the Fed may start cutting rates soon, limiting further gains for the USD and supporting gold prices.
- Atlanta Fed President Raphael Bostic said inflation may slow down in the coming months, expecting only a small 25-basis-point rate cut in 2025.
- Traders are watching US economic data releases on Tuesday, including the Consumer Confidence Index, New Home Sales, and the Richmond Manufacturing Index, for market direction.
- Comments from Federal Open Market Committee (FOMC) members could impact the USD and create trading opportunities for XAU/USD later in the day.
- Friday’s US Personal Consumption Expenditure (PCE) Price Index will be a key event, providing clues about the Fed’s next policy move.
Technical Outlook: Gold Stays Strong Above $3,000 Support
Gold remains stable around the key $3,000 level, acting as an important support zone. If gold falls below this level, it could trigger more selling, pushing prices toward the $2,982-$2,978 range. If selling continues, the decline may extend to the $2,956-$2,954 support area.
On the upside, immediate resistance is at $3,033, the overnight swing high. The next big hurdle is last week’s all-time high of $3,057-$3,058. Since technical indicators on the daily chart remain positive, a further rise in gold prices could continue the long-term uptrend.
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