Gold (XAU/USD) Retraces to $3,310 as Tariff Truce Boosts Dollar
After hitting an all-time peak near $3,500, bullion pulls back into a narrow range—what near-term catalysts will determine whether buyers defend $3,260 or sellers target $3,200? | That's TradingNEWS
Market Pulse and Trade-Talk Headlines
Gold eased into Monday’s Asian session, slipping 0.30 percent to trade near $3,310 an ounce after its blistering rally to fresh record highs last week. Ongoing whispers of partial tariff exemptions by China and US Agriculture Secretary Brooke Rollins’s confirmation of daily “conversations” with Beijing have reignited confidence in the US dollar, siphoning some of the upward momentum from the precious metal. Even so, headline-driven swings remain pronounced as traders weigh next week’s US first-quarter GDP release and Friday’s nonfarm payrolls alongside the fading threat of a US recession that once underpinned gold’s role as a safe-haven.
Shifting Chinese Demand Patterns
Data from the China Gold Association underscores a notable divergence in the world’s largest gold-consuming nation. Jewelry offtake plunged 26.85 percent year-on-year to 134.5 tonnes during Q1, dragging total consumption down more than six percent to 290.5 tonnes. In stark relief, gold bars and coins—favored by retail investors—jumped 29.8 percent to 138.0 tonnes, signaling a pivot toward investment demand despite record price milestones. This bifurcation illustrates how soaring spot rates above $3,400 have dampened ornamental purchases while fueling a hunt for physical bullion.
US Dollar Strength and Economic Data Dynamics
The US Dollar Index recovered to around 99.71 after hitting multi-year lows, bolstered by resilient labor market figures and a blockbuster 9.2 percent surge in durable goods orders for March. Weekly jobless claims came in at 222,000, a modest rise that nonetheless reinforced the Federal Reserve’s optionality for June rate cuts. Fed officials from Cleveland to St. Louis publicly hinted at policy easing this summer if growth moderates, anchoring expectations for up to three quarter-point reductions by year-end. As the dollar firms, gold becomes more expensive for holders of other currencies, capping any rally until softened macro prints or renewed geopolitical tension re-ignite safe-haven flows.
Technical Framework: Support at $3,260 vs. Resistance at $3,370
Charting a three-week ascending channel on daily timeframes, gold appears to be testing the lower boundary around $3,260, the low of last week’s pullback. The Relative Strength Index on that timeframe has dipped toward 58, underscoring waning buying pressure but stopping short of bearish territory. A decisive break beneath the $3,260 trendline would expose Fibonacci support around $3,225, then $3,200, inviting tactical sellers to probe for deeper corrections. Conversely, a successful defense at current levels could draw dip-buyers back in, aiming first for resistance near $3,370 and then the psychological $3,400-$3,427 zone before challenging last week’s $3,500 peak.
Silver’s Echo: XAG/USD Tumbles to $33.44
Silver closely mirrored gold’s retreat, trading near $33.44 after a brief fall to $33.37. The white metal’s steeper pullback reflects its dual role as both industrial commodity and haven, with a risk-on tilt in equities and firmer Treasury yields sapping some speculative interest. Still, support clusters around $33.17 and $33.00 may attract contrarian buyers if fundamentals reassert a cautious tone.
Geopolitical Crosswinds and Safe-Haven Premium
Despite the Monday softness, a missile strike in Kyiv that killed over a dozen civilians reminded markets that geopolitical volatility remains elevated. Reports of North Korean volunteers in the Russia-Ukraine war and Trump’s mixed signals on trade agreements keep uncertainty front-and-center. Those undercurrents provide a floor under gold’s sell-off, ensuring any sharp downside move is likely to find buyers at key technical junctures.
Strategic Stance: Hold with Buy-The-Dip Bias
Given the confluence of easing trade rhetoric, firming dollar and critical support at $3,260, the near-term outlook leans toward consolidation. Tactical traders should hold existing positions but prepare to add if gold retouches $3,260-$3,225 with a tight stop. A failure of that floor would warrant re-assessment, but for now the risk-reward favors guarding against premature exits. Longer-term bulls can maintain exposure with an eye on fresh catalysts—weak US data or renewed bouts of geopolitical turmoil—that could rapidly propel gold back toward record territory.
Near-Term Watchlist
Key US releases this week—JOLTS job openings, Personal Consumption Expenditures, and Friday’s NFP report—will be the heartbeat for dollar and gold alike. A sequence of softer prints could re-energize gold’s ascent, while surprisingly robust figures may steepen the correction. Traders should remain nimble, monitoring price action around $3,260 and $3,370 as the definitive guides for direction.
Final Verdict: Hold current XAU/USD positions, add selectively on dips toward $3,260, and await clear macro or geopolitical triggers before expanding long exposure.
