- Gold prices have had a hard time taking advantage of the day’s movements above $3,400.
- The Federal Reserve’s hawkish pause is supporting the USD and limiting the appeal of gold.
- The positive risk sentiment around the XAU/USD pair seems even more pronounced ahead of the upcoming Trump press conference.
Gold (XAU/USD) is projected to rise to around 3,414-3,415 following a lift in Asian trading, though it retreated to the lower edge of the daily trading range in the last hour. The recent hawkish stance from the Fed is likely to maintain U.S. Treasury yields and solidify the USD. However, caution is warranted before projecting an extension on the gold recovery from Tuesday’s two-week peak.
President Trump mentioned he isn’t rushing to finalize a deal and hopes for a swift resolution to the U.S.-China trade conflict. Additionally, ongoing geopolitical tensions from the Russia-Ukraine war, unrest in the Middle East, and military skirmishes between India and Pakistan are likely to bolster gold prices as a safe haven. Traders appear somewhat hesitant before Trump speaks at 14:00 GMT.
Daily Market Overview: Gold Price Bulls Are Cautious Amid Positive Sentiment Ahead of Trump’s Address
- Trump stated on Wednesday that he isn’t inclined to reduce the 145% tariffs on China to promote trade negotiations. This comes amid optimism surrounding U.S.-China trade talks scheduled for later this week and may provide support for gold prices.
- Moscow’s airports were closed due to a significant Ukrainian drone attack, coinciding with an announced three-day ceasefire. Ukraine claimed Russia launched a guided bomb shortly after that ceasefire began.
- Israeli forces reported significant damage to Sanaa, Yemen’s major airport. In retaliation, members of the Houthi political faction stated their response to the Israeli assault, further elevating geopolitical tensions that support the XAU/USD pair.
- The Federal Reserve maintained interest rates between 4.25% and 4.5% during their recent two-day meeting as expected. They noted increasing uncertainty regarding the economic outlook in their statement.
- At a post-meeting press conference, Fed Chair Jerome Powell remarked on the uncertainty surrounding tariffs, suggesting the need to wait for clearer conditions. This doesn’t bode well for USD bulls but indicates that the Fed isn’t leaning towards rate cuts for now.
- Trump also announced a major trade deal set to be revealed on Thursday, involving representatives from a prominent country. This continues to support a generally positive sentiment in the stock market, which could pose challenges for precious metals.
- Market attention is keenly focused on Trump’s 14:00 GMT press conference. Additionally, the upcoming U.S. unemployment claims data will likely influence USD price dynamics and, in turn, impact the XAU/USD pair during the North American session.
Gold Prices May Attract Some Bargain Hunters Near the $3,365-$3,360 Support Zone
From a technical perspective, new buying activity around the support around the $3,260 mark, combined with subsequent movements, seem to favor XAU/USD bulls. The daily chart oscillators remain comfortably in positive territory, indicating that the resistance levels for gold prices remain manageable. If prices break through $3,434-$3,435 due to strong buying, we could see a retest of previous highs and new attempts at the psychological $3,500 mark.
On the flip side, the $3,465-$3,460 range could serve as a strong immediate support area, followed by the $3,328-$3,327 and rounded $3,300 marks. A decisive break below the latter would challenge short-term projections and possibly lead to technical selling pressure. This could drag prices lower, with potential targets heading towards the $3,200 area and mid-term support at $3,265-$3,260, settling back towards the previous week’s low around $3,223-$3,222.
