The Gold price (XAU/USD) faced renewed selling pressure during the early European session on Wednesday, giving up modest intraday gains it had accumulated during the Asian trading hours. After briefly rising toward the $3,372–$3,373 area, the commodity faltered as the US Dollar (USD) found renewed strength, largely buoyed by upbeat economic data and cautious Federal Reserve rhetoric. 

While the greenback’s rebound capped further gold upside, the broader macroeconomic and geopolitical backdrop continues to provide key underlying support for the precious metal. In this article, NordaLueur’s broker team delivers a detailed and structured analysis.

Modest Upside Meets Resistance as USD Rebounds

Gold’s rally attempt was interrupted as the USD demand resurfaced, lifting the currency off a six-week low it tested earlier this week. This move was reinforced by a stronger-than-expected JOLTS job openings report, which recorded 7.39 million openings in April, well above the forecast of 7.1 million and higher than March’s 7.2 million. 

The data signaled continued labor market resilience in the United States, supporting expectations for ongoing economic strength.

Fed Rate Cut Bets and Fiscal Concerns Cap USD Strength

Although short-term USD buying has surfaced, traders remain cautious about fully committing to bullish positions in the greenback. Market consensus still leans toward at least two 25-basis-point rate cuts by the end of 2025, with softening inflation and fiscal policy concerns acting as limiting factors.

The US fiscal outlook has come under scrutiny following rising budget deficit projections, fueled by current-era tax reforms and fresh spending bills. Fears that these could further destabilize US debt sustainability continue to curb aggressive USD buying, helping gold maintain its footing above the key $3,324–$3,326 support zone.

Geopolitical Tensions and Trade Uncertainties Bolster Gold’s Safe-Haven Appeal

Beyond monetary policy and macro data, geopolitical risks and trade-related uncertainties have played a critical role in shaping gold’s price trajectory.

 Markets are closely watching for a high-level call between the US President and the Chinese President amid renewed trade war fears. The recent escalation, marked by the increase in steel and aluminum tariffs from 25% to 50%, keeps risk sentiment fragile.

Moreover, Fed officials are growing increasingly vocal about the inflationary consequences of these protectionist measures. Lisa Cook, a member of the Fed Board of Governors, warned that trade policies could lead to stagflation, complicating the path toward price stability. 

Similarly, Austan Goolsbee and Raphael Bostic emphasized the need for patience and vigilance, indicating limited room for monetary policy tightening even as inflation remains somewhat sticky.

Technical Setup: Support Holds, Momentum Signals Mild Upside Bias

From a technical standpoint, gold appears to be respecting key levels. Wednesday’s dip toward the $3,326–$3,324 area, previously a resistance barrier, has now turned into strong support. The successful defense of this region is seen by many as a buying opportunity, particularly as oscillators on both hourly and daily charts remain in positive territory.

Immediate upside hurdles are now seen near the $3,380 level, followed by the psychologically significant $3,400 mark. A sustained break above the latter would likely trigger a retest of April’s all-time high and could spark an extension toward the $3,500 psychological handle, representing a key long-term bullish target.

Conversely, any further pullback below $3,355 could again find support at the $3,326–$3,324 pivot. A decisive breach below this zone might open the door for a deeper correction toward $3,300, and potentially as low as the $3,286–$3,285 horizontal support level. However, given the current macro backdrop, such declines may be short-lived.

Key Events Ahead: ADP, ISM Services, and NFP in Focus

Looking forward, the US economic calendar will play a pivotal role in influencing both the USD trajectory and gold’s price action. The ADP private-sector employment report and the ISM Services PMI are due shortly and could set the tone ahead of the much-awaited Nonfarm Payrolls (NFP) report later this week.

Additionally, speeches from influential FOMC members could inject further volatility. Any signs of a dovish tilt will likely weigh on the USD and reinvigorate bullish momentum in gold. Conversely, more hawkish rhetoric or stronger-than-expected macro data could trigger another bout of profit-taking in gold markets.

Conclusion: Gold Holds Its Ground Amid Crosswinds

In summary, while gold has surrendered modest intraday gains, the broader picture remains constructive for bulls. The rebound in the US Dollar is being tempered by dovish Fed expectations, fiscal risks, and persistent geopolitical uncertainties, all of which continue to support demand for gold as a strategic hedge.

With technical support intact and macro tailwinds in play, XAU/USD appears well-positioned for a potential upside continuation, particularly if upcoming data aligns with market expectations for Fed easing. Traders are advised to stay nimble, monitor data releases closely, and watch for any breakout beyond the $3,400–$3,500 resistance band, which could signal a fresh bullish wave for the yellow metal.