The Gold price (XAU/USD) is struggling during the European session on Thursday. After rising for three straight days to reach its highest level since November, Gold has taken a hit. The US Dollar (USD) has been gaining strength for the second day in a row, bouncing back from its recent lows. This stronger Dollar, along with stable stock markets, has reduced the appeal of Gold as a safe-haven investment.
Still, the Federal Reserve (Fed) is expected to lower interest rates twice this year, which is helping to limit the rise in US Treasury yields. This keeps Gold prices from falling too much. Plus, uncertainty about US trade policies, which could cause market volatility, is providing some support for Gold. Investors remain cautious, as it’s unclear if Gold’s uptrend over the past month is over.
Why is Gold Price Falling?
Stronger US Dollar
The US Dollar has recovered from its recent lows. This recovery has reduced the demand for Gold, which is priced in USD, making it less attractive to buyers using other currencies.
Trade Policy Uncertainty
There’s still no clear plan for US trade tariffs, and tensions have eased slightly. This has encouraged investors to take risks in the stock market, lowering the demand for safe-haven assets like Gold.
Interest Rate Expectations
Although the Fed has hinted at keeping rates high to control inflation, many expect it to lower rates twice by the end of the year. This keeps the Dollar’s strength in check and offers some support to Gold prices.
Events to Watch for Gold Price Movement
Trump’s Speech
US President Donald Trump’s speech at the World Economic Forum is a key event. If he announces major trade changes or policies, it could shake the markets and impact Gold prices.
Jobless Claims Report
The Weekly Jobless Claims report from the US could also influence Gold. A higher number of claims may weaken the Dollar and boost Gold.
Bank of Japan Meeting
The Bank of Japan will decide on its interest rates on Friday, which could impact the market. The central bank is expected to raise rates to the highest level since 2008.
Fed and ECB Meetings
Next week, the Federal Reserve and European Central Bank will make their rate decisions. These events could bring major price changes for Gold.
Gold Price Support and Resistance Levels
Gold has strong support at $2,625-$2,620. If prices drop below this range, they may fall further to around $2,700 or lower.
On the upside, Gold faces resistance at $2,763-$2,764. If it rises above this level, the next target is $2,790, which is the all-time high. If that’s broken, prices may continue toward $2,800 or higher.
Conclusion
The Gold price remains under pressure as the US Dollar strengthens and riskier investments like stocks gain popularity. However, Fed rate cuts and uncertainties around US trade policies are limiting further losses. With big economic events coming up, including central bank decisions, Gold prices are likely to see big moves.
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