Gold price today is falling for the second day in a row on Friday but have slightly recovered from a three-day low of $3,020. The US Dollar (USD) is gaining strength due to the Federal Reserve’s (Fed) decision to cut interest rates only twice this year. This stronger USD is making gold less attractive. Additionally, some traders are selling gold to secure profits before the weekend.
However, expectations of future Fed rate cuts may limit the USD’s rise, helping to support gold prices. Concerns over US President Donald Trump’s tough trade policies and their impact on the global economy, along with ongoing geopolitical risks, are preventing gold prices from dropping too much. This makes it uncertain whether gold will continue falling in the short term.
Market Movers: Factors Affecting Gold Prices
- The US Dollar is gaining strength for the third day in a row, putting pressure on gold prices.
- President Trump’s plan to introduce new tariffs on April 2 is making investors cautious. These tariffs come on top of a 25% duty on steel and aluminum introduced in February.
- US Senator Steve Daines is traveling to China for trade discussions, marking the first major meeting since Trump’s return, aimed at restarting stalled talks.
- Russia and Ukraine have intensified their attacks despite peace talks. Ukraine launched drone strikes on a Russian airbase, causing fires and explosions.
- Ukraine reported that Russia launched 171 drones over its territory on Thursday. Meanwhile, US and Russian officials are set to meet in Saudi Arabia on Monday to discuss the Ukraine conflict.
- Israel launched heavy strikes on Gaza on Tuesday, breaking a ceasefire with Hamas. Hamas responded by firing three rockets at Israel, though no casualties were reported.
- The Federal Reserve plans two 25 basis points rate cuts this year and has lowered its growth outlook due to concerns over Trump’s trade policies.
- Fed Chair Jerome Powell warned that tariffs could slow economic growth. Investors now expect interest rate cuts in June, July, and October.
- The expectation of rate cuts could limit USD gains and support gold prices in the absence of major US economic data.
Technical Analysis: Key Levels for Gold Prices
The recent gold price decline is likely due to traders taking profits after a strong rally. However, a lack of strong selling suggests caution before assuming prices will continue dropping.
- If gold falls below $3,023-$3,022, it could attract buyers, limiting further declines near $3,000.
- A clear break below $3,000 could trigger more selling, pushing gold towards $2,980-$2,978 and possibly down to $2,956.
- If sellers stay active, gold may drop further to $2,930 before testing last week’s low near $2,880.
- On the upside, gold faces resistance at $3,057-$3,058, the all-time high reached on Thursday.
- If gold breaks above this resistance, it could attract buyers and extend the uptrend seen over the past three months.
Conclusion
Gold prices are under pressure due to a strong US Dollar, but geopolitical risks and trade concerns are preventing a steep drop. Traders should watch key price levels and upcoming economic data for potential market moves.
