Key Points:
- Gold dipped to $3,310/oz, down from a midweek high of $3,500.
- China may reduce tariffs on U.S. imports, boosting risk sentiment.
- Trump confirmed trade talks with China are ongoing, despite Beijing’s denial.
- The gold-to-silver ratio hit a 30-year high (excluding the pandemic era).
After hitting a record high of $3,500 earlier in the week, gold prices have given up most gains, falling back to the $3,296–$3,310 zone. The reversal comes as traders shift focus from monetary concerns to improving geopolitical sentiment, sparked by a possible de-escalation in U.S.–China trade tensions.
Gold’s status as a safe haven came under pressure following reports that Beijing is actively identifying U.S. products for potential tariff exemption, signaling a thaw in relations. This followed President Trump’s statement that trade talks are still active, countering China’s earlier claim that no formal discussions had resumed.
Macro Drivers
Markets reacted swiftly to this unexpected shift in tone, with risk assets gaining and safe-haven flows pulling back. The dollar firmed modestly, and U.S. yields stabilised, further weighing on gold. Earlier in the week, concerns around Trump’s criticism of the Fed and broader U.S. economic worries had briefly driven gold to fresh highs.
Now, those fears are fading. The narrative has shifted toward tariff relief, which has historically correlated with gold pullbacks.
Technical Analysis
Gold (XAUUSD) experienced a steep pullback after testing the intraday high at 3370.77, with sellers regaining control and dragging prices down to a low of 3287.20. The price has since attempted to consolidate around 3296, but the MACD remains firmly in bearish territory, with the histogram printing consecutive red bars and the signal line diverging below the MACD line.
Picture: Gold breaks lower after a failed push to 3370, with bears tightening their grip as momentum flips decisively south, as seen on the VT Markets app
Short-term momentum is clearly downward, reinforced by the 5-10-30 moving average alignment, where all three are sloping lower and acting as dynamic resistance. The failure to sustain above 3330 triggered the cascade, and price action is now hovering near support from April 24 at 3260.27.
Unless bulls defend the current zone and reclaim the 3305–3315 range, momentum favors continued downside, possibly targeting the 3260 region again in the near term.
Market Outlook
Despite today’s retreat, gold remains one of the best-performing assets of 2025, and broader macro risks haven’t fully abated. However, near-term upside may remain capped as traders seek clarity on U.S.–China trade dynamics and Fed policy expectations ahead of next week’s inflation data.
Unless new tensions flare or economic data surprises to the downside, gold may consolidate further, with the current pullback offering a test of how sticky safe-haven demand remains.
