-
Gold price faces heavy intraday selling, declining for the second consecutive day.
-
The USD strengthens as the Fed's hawkish pause weighs on the non-yielding commodity.
-
Positive risk sentiment pressures the XAU/USD pair ahead of Trump's press conference.
Gold price (XAU/USD) declines for the second consecutive day after an intraday rise to the $3,414-3,415 range, continuing its downward trend into the European session on Thursday. The US Dollar (USD) remains strong following the Federal Reserve's (Fed) hawkish pause on Wednesday, putting pressure on the non-yielding yellow metal. Additionally, positive sentiment in the equity markets diverts investor interest away from Gold.
US President Donald Trump dampened expectations of a quick resolution to the US-China trade war, stating he is in no rush to sign any agreements. Despite this, ongoing geopolitical risks, including the Russia-Ukraine conflict, tensions in the Middle East, and military confrontations on the India-Pakistan border, could support Gold as a safe-haven asset. Traders remain cautious ahead of Trump’s press conference scheduled for 14:00 GMT.
Daily Digest Market Movers: Gold Price Pressured by Hawkish Fed and USD Strength
- The Gold price (XAU/USD) remains under pressure, weighed down by the US Dollar’s modest strength following the Federal Reserve's (Fed) hawkish stance. The Fed, as expected, held its key interest rate steady between 4.25%-4.5% at the conclusion of its two-day meeting on Wednesday.
- In the post-meeting statement, the central bank expressed growing uncertainty about the economic outlook. During the press conference, Fed Chair Jerome Powell emphasized the need for caution amid tariff-related uncertainties, indicating that rate cuts are unlikely in the near future. This sentiment has bolstered the USD, adding pressure on Gold.
- US President Donald Trump, speaking on Wednesday, dismissed the possibility of lowering the 145% tariffs on China to advance trade negotiations. While this stance curbed optimism about the upcoming US-China trade talks, it provided some intraday support for the safe-haven Gold price.
- Trump announced on Truth Social that he would reveal a major trade deal with a significant and respected country on Thursday, reinforcing positive risk sentiment in equity markets and creating a potential headwind for Gold.
- Meanwhile, geopolitical tensions continue to influence market sentiment. In Russia, a massive Ukrainian drone attack forced the shutdown of airports across Moscow, coinciding with Russian President Vladimir Putin’s three-day truce announcement. Just hours after the ceasefire began, Ukraine reported that Russia had launched guided bombs, escalating tensions. In the Middle East, the Israeli military claimed to have completely disabled Sanaa airport in Yemen, controlled by the Houthis. In response, Houthi leaders warned of imminent retaliation, keeping geopolitical risks elevated and offering some support to Gold as a safe-haven asset.
- Market participants are closely watching Trump’s press conference at 14:00 GMT, where details of the major trade deal are expected. Additionally, the release of the US Weekly Initial Jobless Claims data will influence USD price movements and impact the XAU/USD pair during the North American session.
Gold Price Technical Analysis: Key Levels to Watch
Technically, the emergence of fresh buying around the $3,260 support and the subsequent upward move indicate bullish sentiment for Gold. The oscillators on the daily chart remain in positive territory, suggesting that the most likely direction remains upward. Sustained buying beyond the $3,434-3,435 region, which represents the weekly high, would reaffirm this positive outlook and pave the way for a retest of the all-time high around the $3,500 mark.
However, any decline could encounter support near the $3,300 level. A decisive break below this round figure could negate the short-term bullish outlook and prompt technical selling. In such a scenario, the Gold price could slide towards the intermediate support zone of $3,265-3,260 and further down to the $3,223-3,222 area, with the previous swing low near $3,200 acting as a key support level.
Investors should stay tuned for updates from Trump’s press conference and the US economic data release, as these factors could significantly influence Gold price dynamics.
