Gold price shows signs of bullish exhaustion amid positive turnaround in risk sentiment

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  • Gold price rebounds from the Asian session trough as the USD stalls its recovery from a multi-year low.

  • The weakening investors’ confidence in the US economy and Fed rate cut bets weigh on the Greenback.

  • The optimism over easing US-China tensions remains supportive of the risk-on impulse and caps the XAU/USD pair.


Gold price (XAU/USD) attracted dip-buyers in Asia on Wednesday, stalling its retreat from the $3,500 peak hit the day before. The attempted US Dollar (USD) recovery from a multi-year low faltered amid the weakening confidence in the US economy on the back of US President Donald Trump’s back-and-forth tariff announcements. Apart from this, the prospects for more aggressive policy easing by the Federal Reserve (Fed) prompt some intraday USD selling and turn out to be a key factor that helps revive demand for the non-yielding yellow metal.


Meanwhile, Trump administration officials hinted at a potential de-escalation of the ongoing tariff dispute with China and fueled optimism about a trade deal. Adding to this Trump stepped back from his threats to dismiss Federal Reserve (Fed) Chair Jerome Powell. 


Furthermore, Russian President Vladimir Putin indicated he is open to the prospect of direct talks with his Ukrainian counterpart Volodymyr Zelenskyy, raising hopes for a ceasefire and further boosting investors' appetite for riskier assets. This is evident from a sharp recovery across the global equity markets, which, in turn, is holding back traders from placing fresh bullish bets around the safe-haven Gold price.


Daily Digest Market Movers: Gold price bulls remain on the defensive amid hopes for a US-China trade deal


  • US equity indices rose sharply on Tuesday after US President Donald Trump backtracked on his criticism of Federal Reserve  Chair Jerome Powell and said that he has no intention of firing him before the expiry of his term in May 2026.

  • Adding to this, upbeat comments from Trump administration officials about US-China trade talks further boosted investors' confidence and prompted some profit-taking around the safe-haven Gold price following the recent record run.

  • US Treasury Secretary Scott Bessent said that the tariff war between the US and China would de-escalate soon. Later, White House spokeswoman Karoline Leavitt told reporters that the Trump administration is setting the stage for a deal.

  • Russian President Vladimir Putin said that he had a positive attitude towards any peace initiatives. In response, Ukrainian President Volodymyr Zelenskyy said on Tuesday that we are ready to sit down in any format after the ceasefire.

  • Meanwhile, Trump's rapidly shifting stance on trade policies has eroded investors' trust and weakened confidence in the US economy. This fails to assist the US Dollar in preserving modest Asian session gains and supports the XAU/USD pair.

  • Furthermore, the markets have been pricing in the possibility that the Federal Reserve will resume its rate-cutting cycle in June and lower borrowing costs at least three times by the end of this year, further benefiting the non-yielding yellow metal.

  • Traders now look forward to the release of global flash PMIs for a fresh insight into global economic health. This, along with trade-related developments, will influence the risk sentiment and provide some impetus to the precious metal.


Gold price could extend the corrective slide from the all-time peak while below the 23.6% Fibo. level



From a technical perspective, the precious metal now seems to have found acceptance below the 23.6% Fibonacci retracement level of the latest leg up from the vicinity of mid-$2,900s, or the monthly swing low. This, along with the lack of any further intraday buying, could be seen as initial signs of possible bullish exhaustion and supports prospects for further losses. 


However, oscillators on the daily chart are still holding comfortably in positive territory and warrant caution before placing aggressive bearish bets. Hence, any subsequent slide below the Asian session low, around the $3,315 area, is likely to find decent support and remain limited near the 38.2% Fibo. level, around the $3,289 region. That said, a convincing break below the latter should pave the way for some meaningful corrective fall in the near term.


On the flip side, the $3,370 area (23.6% Fibo. level) now seems to act as an immediate hurdle ahead of the $3,400 mark. Some follow-through buying has the potential to lift the Gold price to the $3,424-3,425 horizontal resistance, above which bulls could make a fresh attempt to conquer the $3,500 psychological mark. A sustained strength beyond the latter will set the stage for an extension of the recent well-established uptrend witnessed over the past four months or so.

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  • Gold Price Forecast: Gold Tumbles Below $3,900 as Trump Says No Need for Iran Deal; Can October PPI Spur a Rebound?
  • * The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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