Gold price retreats from its all-time high as profit-taking sets in, with $3,300 acting as a crucial level for bulls

Gold price (XAU/USD) remains pressured below the fresh all-time high reached earlier on Thursday, dipping to a daily low around $3,314 during the first half of the European session. Optimism surrounding US trade negotiations triggered a modest recovery in global risk sentiment, while some US Dollar (USD) buying, bolstered by strong US Retail Sales and hawkish comments from Federal Reserve Chair Jerome Powell on Wednesday, led to profit-taking in the precious metal.

Despite this, uncertainty surrounding US President Donald Trump’s tariff decisions, the escalating US-China trade war, and global recession fears could continue to support Gold as a safe-haven asset. Additionally, expectations that the Federal Reserve may resume its rate-cutting cycle in June and reduce borrowing costs by a full percentage point by year-end may limit the USD's recovery, helping to cushion any losses for the non-yielding yellow metal and signaling caution for bearish traders.

Daily Digest Market Movers: Gold Price Pressured by Multiple Factors; Downside Appears Supported

• Gold prices remain under pressure due to a combination of factors, although downside risks appear limited. The US Census Bureau reported a 1.4% increase in Retail Sales for March, the highest in over two years, surpassing expectations of a 1.3% rise and following a revised 0.2% gain in February. Additionally, Federal Reserve Chair Jerome Powell’s comments on Wednesday indicated that the Fed is unlikely to cut interest rates in the near term, citing inflationary risks linked to President Donald Trump’s aggressive tariff policies.
• Meanwhile, equity markets in Asia-Pacific showed gains on Thursday, and some buying interest in the US Dollar (USD) further dampened bullish sentiment towards gold, capping its upside potential. The trade war between the US and China continues to intensify, with China imposing 125% tariffs on US goods and restricting exports of rare earth elements. The US has also limited exports of AI chips to China, prompting retaliatory measures.
• Concerns over the ongoing tariff dispute and its potential to dampen global economic growth continue to fuel demand for gold as a safe-haven asset. Furthermore, expectations that the Fed could resume its rate-cutting cycle in June prevent USD bulls from taking aggressive positions, offering additional support for gold.
• Looking ahead, traders are focusing on the US economic data releases, including the Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and housing market statistics, along with any further comments from the Federal Reserve for potential short-term trading opportunities.

Gold price may accelerate its corrective pullback if the key $3,300 support level is broken decisively.

From a technical standpoint, the daily Relative Strength Index (RSI) remains above 70, indicating overbought conditions. It’s advisable to wait for a period of consolidation or a modest pullback before positioning for a continuation of the uptrend seen over the past four months. In the short term, any corrective move is likely to find support around the $3,300 level, which should act as a pivotal point. A decisive break below this level could lead to further declines.