Gold price remains above the $3,000 level but struggles to gain bullish momentum amid a positive risk sentiment

Gold (XAU/USD) remains above the $3,000 psychological level for the second consecutive day on Wednesday but struggles to surpass the previous session’s high. Ongoing uncertainty surrounding US President Donald Trump's reciprocal tariff plans supports safe-haven demand for gold. Meanwhile, a weaker US Dollar (USD), weighed down by disappointing macroeconomic data, provides additional support for the precious metal.

Growing expectations that the Federal Reserve (Fed) will resume rate cuts amid US recession fears further bolster gold’s appeal. However, a generally positive risk sentiment caps further upside for XAU/USD, as investors await the US Personal Consumption Expenditure (PCE) Price Index release before making decisive moves. The overall market outlook continues to favor an upward trajectory for gold.

Daily Market Movers: Gold Benefits from Trade Uncertainty, Fed Expectations, and a Weak USD

• The US Dollar lost momentum after Tuesday’s data showed a sharp decline in the Conference Board’s Consumer Confidence Index to a four-year low of 92.9. Additionally, the Expectations Index fell to 65.2, marking a 12-year low and signaling heightened recession risks.
• The Federal Reserve’s downward revision of its growth outlook last week, coupled with reports suggesting Trump’s reciprocal tariffs may be more targeted, has eased inflation concerns. This environment could allow the Fed to continue cutting rates, further supporting gold prices.
• The market currently anticipates at least three rate cuts in June, July, and October, despite hawkish remarks from Fed Governor Kugler, who advocates holding rates steady.
• Trump’s imposition of secondary tariffs on Venezuela and his planned retaliatory tariffs on 15 key US trading partners add to global trade uncertainty, keeping investors cautious.
• Reports indicate that Russia and Ukraine have agreed to halt military strikes in the Black Sea and on energy infrastructure, following US-mediated negotiations. Additionally, optimism over China’s stimulus efforts aimed at boosting domestic consumption continues to support risk sentiment and limit gold’s upside.
• Investors now turn their attention to Wednesday’s US Durable Goods Orders and speeches from key Federal Open Market Committee (FOMC) members for further USD direction. However, the main focus remains on the upcoming PCE Price Index, which could provide fresh insight into the Fed’s policy path and drive gold prices.

Technical Analysis: Gold Eyes All-Time High Amid Bullish Momentum

Gold’s ability to hold above $3,000 and its recent rebound suggest the path of least resistance remains upward. A breakout above the $3,036 level could confirm a bullish continuation, potentially pushing XAU/USD toward its all-time high of $3,057-$3,058 reached last week.

On the downside, $3,000 remains a key psychological and technical support level. A break below this threshold could trigger a pullback to the $2,982-$2,978 region, with further downside risks extending toward $2,956-$2,954. However, as long as gold holds above $3,000, the broader bullish outlook remains intact.