empty
07.04.2025 06:52 PM
XAU/USD. Analysis and Forecast

This image is no longer relevant

At the moment, gold has halted its corrective decline from the all-time high reached last week.

The recent plunge in global financial markets, triggered by the mutual tariffs initiated by U.S. President Donald Trump, is providing support to the safe-haven metal. Trump imposed tariffs of at least 10% on all imported goods, with China being hit especially hard by 54% duties. In response, China's Ministry of Commerce announced additional tariffs of 34% on all imports from the U.S. U.S. Commerce Secretary Howard Lutnick confirmed that the tariffs will not be postponed and will remain in effect in the coming days and weeks. Trump also stated that there would be no deal with China unless the trade deficit is resolved.

In addition, it was reported today that the People's Bank of China has increased its official gold reserves for the fifth consecutive month, which is also supporting investor interest in gold bullion.

The ongoing risk-off sentiment and expectations that the U.S. economic slowdown—triggered by the tariffs—could prompt the Federal Reserve to resume its rate-cutting cycle earlier than anticipated, are contributing to a decline in U.S. Treasury yields. This, in turn, is weakening the dollar, which has been unable to recover from its multi-month lows.

This image is no longer relevant

Persisting geopolitical risks are also increasing the appeal of gold. However, traders continue to liquidate their long positions to cover losses elsewhere, which in turn is capping gold's price growth and calls for some caution.

From a technical standpoint, the sharp decline in gold from its all-time high has stalled near the $2957 level, which previously served as a breakout point. The subsequent upward move has been capped at resistance near $3057, which has now become a key level—its breakout would pave the way toward the $3080 level, on the path back to the record high.

On the other hand, the psychological level of $3000 is acting as the first line of defense against an immediate drop, ahead of the $2980–2967 level or the low of the current correction. If this level is breached, the short-term bias will shift in favor of the bears, potentially triggering a deeper decline toward the 50-day simple moving average (SMA) and beyond.

It is also worth noting that the RSI (Relative Strength Index) is losing momentum.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

BoE Is Concerned About the Economy

I regularly monitor three central banks, each representing an almost entirely different approach to monetary policy. On Thursday, the Bank of England cut interest rates, citing concerns over slowing economic

Chin Zhao 01:35 2025-05-09 UTC+2

The Fed Chair Is Steadfast as Steel

Everyone has already had time to review the results of the recent Federal Reserve meeting. In this article, I want to highlight a few positive points for the U.S. dollar

Chin Zhao 01:16 2025-05-09 UTC+2

GBP/USD: Bank of England Cuts Rates, Trump Signs Trade Deal with London

On Thursday, the Bank of England delivered a widely expected 25 basis point interest rate cut, and Donald Trump announced the conclusion of a trade agreement with the United Kingdom

Irina Manzenko 00:28 2025-05-09 UTC+2

The Dollar Shot Itself in the Foot

As the first week of May comes to a close, a true spring has arrived on the financial markets. Global risk appetite is surging amid the imminent launch of U.S.-China

Marek Petkovich 00:28 2025-05-09 UTC+2

EUR/USD. Analysis and Forecast

On Thursday, the EUR/USD pair is falling below the psychological level of 1.1300. The election of Friedrich Merz as Chancellor of Germany reduces uncertainty regarding the economic strength

Irina Yanina 11:12 2025-05-08 UTC+2

The Market Will Save Itself

The Fed is no longer the center of the financial universe, and the S&P 500's 13% rally from April lows has once again made U.S. equities expensive. That sums

Marek Petkovich 10:13 2025-05-08 UTC+2

Fed's Rate Hold and US-China Talks Support the Dollar (High Likelihood of EUR/USD and Gold Declines)

The Federal Reserve remained firm, with its leadership reaffirming a steadfast wait-and-see approach. Interestingly, the Fed did not respond to notable changes in the economy, citing heightened uncertainty

Pati Gani 09:53 2025-05-08 UTC+2

The Bank of England Is Ready to Cut Rates

The Bank of England is expected to cut interest rates by a quarter of a percentage point today and signal that another reduction is likely in June. This could potentially

Jakub Novak 09:21 2025-05-08 UTC+2

Why Gold Dropped Sharply After the Fed Meeting

Gold experienced a slight uptick following the Federal Reserve's meeting, where interest rates were kept unchanged and Fed Chair Jerome Powell stated that the central bank is in no rush

Jakub Novak 09:17 2025-05-08 UTC+2

FOMC Meeting Results

The euro and British pound resumed their decline against the US dollar following the release of the Federal Reserve meeting results; however, the drop was not significant, and the future

Jakub Novak 09:15 2025-05-08 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.