Gold price hovers near daily low as positive risk sentiment weighs, while a weaker USD helps cushion losses

Gold price (XAU/USD) remains under modest intraday pressure but lacks strong bearish momentum, holding comfortably above the $3,200 level ahead of the European session on Wednesday. Market sentiment remains buoyed by optimism surrounding a de-escalation in the US-China trade conflict, undermining demand for the safe-haven precious metal.

The latest US inflation data, released on Tuesday, came in softer than expected, reinforcing expectations of at least two interest rate cuts by the Federal Reserve in 2025. This has kept the US Dollar (USD) subdued below its recent one-month peak, limiting the downside for non-yielding Gold. Given the cautious sentiment, traders await further selling pressure before positioning for deeper losses.

Daily Digest Market Movers: Gold Price Faces Headwinds Amid Trade Optimism

• US President Donald Trump stated on Monday that he does not anticipate reinstating the 145% tariffs on Chinese imports after the 90-day pause.
• In a Fox News interview on Wednesday, Trump remarked that the relationship with China remains excellent, bolstering trade optimism and applying pressure on safe-haven Gold during Asian trading hours.
• Geopolitical tensions remain, however, as Russia and Ukraine prepare for high-level talks in Istanbul this week—the first since 2022—amid calls for Russia to agree to a 30-day ceasefire.
• US Secretary of State Marco Rubio, along with special envoys Steve Witkoff and Keith Kellogg, are set to participate in the discussions. Additionally, the Israeli military reported intercepting a hypersonic ballistic missile fired by Iran-aligned Houthi militants toward Ben Gurion Airport from Yemen on Tuesday. These risks may temper aggressive bearish sentiment around XAU/USD.
• The US Bureau of Labor Statistics (BLS) reported that the headline Consumer Price Index (CPI) declined to a 2.3% year-over-year rate in April from 2.4% in the previous month. The core CPI, excluding volatile food and energy prices, rose 2.8% on an annual basis, in line with forecasts.
• Market participants continue to price in a potential 56 basis-point reduction in the Fed’s policy rate in 2025, keeping the USD from gaining traction despite a pullback from its recent highs.
• With no significant US economic data scheduled for Wednesday, the USD will likely respond to remarks from Federal Reserve officials, while broader market sentiment could shape short-term trading opportunities for Gold.

Technical Outlook: Gold Price Bears Eye $3,200 Break

Technically, the XAU/USD pair continues to hold near the 200-period Exponential Moving Average (EMA) around $3,225 on the 4-hour chart. Oscillators on the daily chart are beginning to drift into negative territory, suggesting that a decisive break below this support could trigger fresh selling. A sustained decline under the $3,200 level would confirm a bearish breakdown, possibly accelerating a fall toward the next significant support at $3,135.

Conversely, the immediate resistance is around the $3,265-$3,266 area. If Gold surpasses this level, it may reclaim the $3,300 mark. Further bullish momentum could drive prices towards the $3,317-$3,318 region, potentially setting the stage for a climb to the $3,345-$3,347 barrier and the next resistance at $3,360-$3,365. A sustained rally beyond $3,365 would open the door to the $3,400 psychological level.