Gold price drop (XAU/USD) experiences a sharp decline on Thursday, tumbling over 1.25% to approximately $3,095 as selling pressure mounts. Investors engage in profit-taking, pushing bullion below key support levels. Financial markets remain unsettled following U.S. President Donald Trump’s unexpected announcement of reciprocal tariffs, sparking volatility across multiple asset classes.
Gold Price Drop: Key Market Developments
- U.S. enforces a 10% global base tariff on imports.
- China faces a combined 54% tariff effective immediately.
- Stock markets drop, bond yields decline, and the U.S. dollar weakens.
Gold Price Drop: Global Trade Tensions & Safe-Haven Demand
The tariff policy shift has triggered significant market uncertainty. Equities worldwide suffer losses, bond prices surge as investors seek security, and the U.S. dollar depreciates against major counterparts. Consequently, gold price drop strengthens its status as a preferred safe-haven asset, reinforcing its appeal during market distress amid rising market volatility.
Despite a general downturn in global equities, Asian gold producers witness gains, benefitting from heightened demand. Bloomberg highlights the impact of trade fears on economic outlooks, driving more investors toward gold as a protective measure.
Federal Reserve Rate Outlook
The CME FedWatch Tool places the probability of a May interest rate cut at 21.5%, with June remaining the primary focus for monetary policy adjustments. A shift in the yield curve indicates that the Federal Reserve may extend its current pause, influencing rate expectations in the near term.
U.S. Trade Policy Adjustments
The White House confirms exemptions for steel, aluminum, gold, and copper from the reciprocal tariffs, offering some relief to domestic buyers. Reuters reports that Section 232 of the Trade Act of 1962 continues to impose a 25% tariff on certain key metal imports. Treasury Secretary Scott Bessent states that tariff removals could occur if foreign manufacturers relocate production to the United States.
Gold Price Technical Analysis
Resistance Levels:
- $3,149: Initial level to recapture.
- $3,167: Recently established all-time high, aligning with R2 resistance.
- $3,200: Broader upside objective.
Support Levels:
- $3,111: Crucial level to sustain for bullish momentum.
- $3,089: Key support to maintain prices above the $3,000 threshold.
Gold prices remain sensitive to evolving trade negotiations. If diplomatic efforts ease tensions, market sentiment could shift, leading to a decline in gold demand. However, further retaliatory measures could drive prices toward new record highs.
For in-depth market analysis, visit Daily Gold Signal. For the latest gold market updates, check Daily Gold Update.
