Gold Crashes to $3,277 — Is This Your Final Entry Before $3,366 Comes Back in Play?
XAU/USD is flashing critical support near $3,245. With Fed risks rising, will gold break or explode higher? | That's TradingNEWS
Gold Price Retreats to $3,277 as Dollar Firms and Fed Holds: Will XAU/USD Rebound or Break Below $3,200?
Rising yields, Fed hesitation, and macro shifts force a tactical revaluation of bullion's path. Can gold hold ground near $3,245 or is deeper pain ahead?
XAU/USD Fades From $3,366 Highs as Dollar and Treasury Yields Weigh on Short-Term Direction
Gold (XAU/USD) is losing altitude again, trading just below $3,277 per ounce after retreating nearly 2.6% from its recent high near $3,366. The slide continues for a fourth straight session, with key pressure points stemming from a hawkish tone in the Federal Reserve’s May minutes and an increasingly resilient US dollar. The 10-year US Treasury yield has climbed to 4.49%, while the Dollar Index (DXY) now sits firmly above 99.80, buoyed by strong consumer confidence and muted recession fear. These two forces are limiting gold’s near-term upside, as real yields remain elevated and the opportunity cost of holding non-yielding bullion rises.
On the technical front, gold remains under the 200-period SMA on the 4-hour chart and is testing support near the 50% retracement level at $3,245. A break below could open downside potential toward $3,215 or even the $3,180 psychological mark. Momentum indicators are flashing bearish warnings, with the MACD printing a red histogram beneath neutral and RSI dipping below 50. Bulls are trying to defend the $3,247 floor, but the bearish rejection at $3,303 and again at $3,324 suggests that sellers remain active on rallies.
Central Banks, Emerging Asia, and ETF Flows: The Divergence Behind the Gold Price Support
Despite near-term bearish sentiment, fundamental flows tell a more complex story. Swiss data shows US-origin gold shipments to Switzerland hit a 12-year high in April, while China’s imports via Hong Kong more than doubled month-over-month. This structural buying from Asia and emerging markets provides a floor under the gold market, especially as sovereign accumulation ramps up in reaction to Western fiscal instability.
Jim Luke of Schroders believes this sovereign accumulation—largely from Asian central banks—is not price-sensitive and creates a base for long-term support. He adds that western investors are only now beginning to participate, making a deep correction in XAU/USD less likely unless US fiscal credibility rapidly improves.
Contrary to this thesis, Jupiter’s Ned Naylor-Leyland argues that while central banks play a role, the dominant driver has been futures-market momentum and shifting real yield dynamics. He sees the recent rally as a result of traders pricing in a weaker dollar trajectory and the unresolved fiscal deficit in the US. He warns that although futures flows are bullish, they can reverse quickly, especially if real yields continue climbing.
Gold Miners Lag Bullion Rally as Retail Flow Turns Toward Crypto
Another critical divergence in the current gold rally is between physical bullion and the equities of gold miners. Funds like those managed by Luke at Schroders have overweighted both bullion and miners, noting that the miners have significantly underperformed the metal. This underperformance is particularly pronounced among junior exploration stocks, which traditionally relied on US retail participation—a segment that has increasingly shifted toward crypto.
Eastern demand continues to drive spot prices, but western equity markets have not responded in kind. This dislocation has widened the risk-reward ratio for gold equities. Luke sees attractive valuation multiples, especially given the current price of gold and low break-even costs among mid-cap producers.
Safe-Haven Thesis Fractures Amid Strong Equities and Trump Tariff Ruling
The federal court ruling this week that blocked Trump’s across-the-board tariffs stripped one of the key geopolitical tailwinds for safe-haven assets like gold. Equities surged in response, with Nasdaq and S&P 500 futures rallying over 1%, pulling capital away from defensive assets. That legal setback also reduced concerns about escalation in global trade frictions, contributing further to the XAU/USD pullback.
However, gold’s response has been asymmetric. Geopolitical risks persist. The US is reportedly moving to restrict semiconductor-related exports to China, Israel launched another strike on Houthi positions in Yemen, and peace talks between Russia and Ukraine remain highly uncertain. These unresolved global tensions continue to justify a bid in gold, even as the market cycles through temporary repricing events.
Institutional Positioning and Structural Flows Keep the Bull Case Intact
CITIC Futures notes that the market has priced in much of the near-term negative macro—namely delayed rate cuts and no near-term default risk. Technicals may point to a consolidation, but structurally, demand remains firm. Goldman Sachs continues to recommend long-term gold exposure, citing rising institutional credibility risk in US debt and the unwavering pace of central bank gold buying. The firm views gold as one of the few hard assets with a robust supply/demand profile across both retail and sovereign channels.
Jinrui Futures adds that with the tariff headline digested and no US credit crisis imminent, gold may enter a lower-volatility consolidation zone. This would provide a healthier base for the next move, with the $3,303 and $3,324 zones serving as upside triggers should sentiment turn more constructive on a soft PCE inflation print or dovish Fed shift.
XAU/USD Technical Levels to Watch as Volatility Compresses
Key resistance remains $3,303 and $3,325. A close above these would revalidate the short-term bullish thesis and could initiate a push toward the $3,366 cycle high. If bulls can reclaim the 50-EMA on the H4 chart and break through channel resistance, upside targets expand toward $3,345 and potentially $3,370–$3,400.
On the downside, sustained action below $3,245 reopens $3,215 and then $3,200. If XAU/USD breaches $3,180, sentiment would likely deteriorate further, and a test of the 61.8% retracement at $3,172 would become likely.
Will Gold Reclaim $3,300 or Slip Below $3,200 as US Data Hits?
The upcoming US GDP revision and PCE inflation data are now in the driver’s seat for gold. The market has priced in about 45 basis points of Fed cuts by year-end, but a hot PCE reading or hawkish rhetoric could push yields higher and the dollar stronger, keeping pressure on bullion.
Until then, gold traders are caught in a narrow channel of macro tension, shifting flows, and technical uncertainty. While short-term momentum favors sellers, the long-term architecture of demand—from sovereigns, ETFs, and institutional allocators—remains deeply supportive.
