The Gold price rebound from a multi-week low offers some relief to traders but lacks strong follow-through. After dipping near the $2,972 mark during early Asian trading on Monday, the yellow metal briefly surged above $3,055. However, investors remain cautious amid lingering economic uncertainty and recent hawkish signals from the U.S. Federal Reserve.
Key Highlights
- Gold price rebound follows a brief dip to $2,972 in early Asian trading hours.
- China’s central bank adds gold to reserves for the fifth consecutive month.
- Global trade tensions and recession fears drive investor sentiment.
- Strong U.S. payroll data and Powell’s comments limit upside potential.
- Price action faces resistance near $3,055 and support at the $3,000 zone.
Global Market Backdrop Supports Gold, but Caution Prevails
The Gold price rebound finds support from growing global uncertainties. Recession fears have been reignited as a result of an escalating U.S.–China trade conflict. Investors moved away from risky assets, leading to increased interest in gold as a traditional safe haven.
On Monday, data revealed that the People’s Bank of China increased its gold reserves for a fifth straight month. The central bank’s holdings grew by 0.09 million troy ounces in March, signaling continued confidence in gold amid global market volatility.
Adding to that, rising geopolitical tensions and economic slowdown concerns helped gold attract modest bids. However, Friday’s robust Nonfarm Payrolls report showing a 228K job gain limited the metal’s upside.
Tariff Developments Amplify Risk-Off Mood
Tensions between the U.S. and China escalated after President Trump imposed tariffs of at least 10% on all imports. In retaliation, China’s Commerce Ministry announced new tariffs of 34% on U.S. goods. U.S. Commerce Secretary Howard Lutnick confirmed that the tariffs would stay for weeks.
This trade war development further spooked global markets. The resulting equity sell-off led investors to liquidate gold positions to cover broader losses. Still, the Gold price rebound remained intact above the critical $3,000 psychological support.
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Technical View: Key Levels to Watch for Gold Traders
Gold’s recent pullback from record highs paused near the 61.8% Fibonacci retracement zone of the February-April uptrend. However, the rebound faced rejection at the $3,055 resistance, formerly a support zone.
A clean break above $3,055 is essential to confirm renewed bullish momentum. If achieved, prices could rise toward $3,080, with further gains eyeing the $3,100 level.
On the downside, $3,000 remains critical. A break below this level could drag prices back toward $2,971. A decisive move under the 50-day Simple Moving Average at $2,946 may invite deeper corrections, favoring bears in the short term.
Expert Insight: Fed Policy Stance Adds Complexity
Fed Chair Jerome Powell recently remarked that while inflation is near target, it remains somewhat elevated. He warned that new tariffs could intensify inflationary pressures, which the Fed aims to prevent from becoming persistent.
Despite the NFP data and Powell’s stance, markets still price in potential rate cuts later this year. Traders anticipate the central bank may begin easing by June, which keeps the dollar on the defensive and indirectly supports gold’s appeal.
Conclusion: Gold Price Rebound Faces Crucial Test Ahead
The Gold price rebound offers a cautious recovery amid complex market forces and policy uncertainty. While support remains firm above $3,000, resistance near $3,055 must be overcome for a sustained rally. Ongoing economic data, Fed signals, and geopolitical headlines will continue to shape gold’s direction in the days ahead.
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