Last week, XAU/USD bullish trend continued as Trump pressured Apple to manufacture in the US (threatening 25% tariffs) and suggested potential 50% EU tariffs, driving gold from $3,287 to $3,365. Despite the recent pullback, gold is expected to rise. China’s net gold imports via Hong Kong significantly increased in April. Geopolitical tensions remain due to Russia’s continued attacks on Ukraine, met with a strong reaction from Trump.
This week’s US economic data includes April Durable Goods Orders, FOMC minutes, Q1 2025 GDP (second estimate), and the Core PCE Price Index.
Downward Pressure on Gold Despite Economic Concerns
Gold prices experienced downward pressure despite stable US Treasury yields and a decline in real yields. While concerns regarding US fiscal policy, including Moody’s recent credit rating downgrade and a significant increase in the debt ceiling, presented a potentially supportive backdrop, increased risk appetite among investors weighed on the precious metal’s valuation. A marginal depreciation of the US Dollar Index (DXY) to 99 provided limited countervailing support.
XAU/USD Technical Outlook
Gold prices slightly retreated as traders took profits amid low US liquidity due to a holiday. Trump’s trade policy uncertainty may cause volatility to resume. Technically, gold’s bull trend holds. A daily close above $3,300 could lead to testing $3,365, then $3,400, the $3,438 May 7 high, and the $3,500 ATH. Conversely, falling below $3,300 may trigger a move to the $3,204 May 20 low and the $3,199 50-day SMA.
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