Gold Price (XAU/USD) Battles Key Resistance Near $3,352 as Bulls Lose Steam
XAU/USD remains range-bound with Fed policy, central bank buying, and trade optimism pulling price in opposing directions | That's TradingNEWS
Gold (XAU/USD) Faces Resistance as Bulls Struggle to Sustain Momentum Near $3,338
US-EU Trade Developments Pressure Safe-Haven Demand for Gold (XAU/USD)
Gold prices pulled back sharply as market optimism surged following the US-EU trade agreement. Spot gold slipped to $3,313.57 per ounce, having tested a session low of $3,302.50, with US gold futures also retreating to $3,307.60. The risk-on appetite triggered by successive trade announcements—including the US-Japan deal and anticipated US-China discussions—fueled a rally in the US Dollar Index, which rose to a one-week high. This strengthened dollar added pressure on gold by making it more expensive for foreign buyers. The tariff-friendly dollar environment effectively undercut safe-haven flows into XAU/USD, especially as investors rotated into riskier assets ahead of major Big Tech earnings and U.S. macro data.
Technical Compression Between Rising Support and Key Resistance at $3,352
Gold (XAU/USD) has entered a compression zone with support anchored around $3,310–$3,312—aligned with the 50-day EMA and ascending channel trendline—while facing firm resistance at $3,352, where the 20-day EMA and a descending trendline intersect. The price recovery from the three-day slide found footing near $3,312, yet upward momentum has stalled just below $3,338. The daily RSI at 52.57 underscores neutral bias, and without a clear breakout, gold remains range-bound between $3,312 and $3,352. A decisive close above $3,352 would open the path to $3,450–$3,470. Conversely, failure to defend $3,310 could push XAU/USD down to retest the 100-day EMA at $3,222 and possibly the monthly low around $3,283.
Macroeconomic Factors Weigh on Gold Despite USD Weakness
Despite a temporary stall in the dollar rally, macro conditions remain unfavorable for gold’s upside. President Trump's recent diplomacy—including the US-EU deal, Japan’s pact, and his mediating role between Cambodia and Thailand—has lowered geopolitical tensions and undermined demand for safe-haven assets. Expectations that the Fed will maintain rates in the 4.25%–4.50% corridor at this week's FOMC meeting further complicate gold's appeal, as the lack of dovish pivot limits immediate upside. Meanwhile, insiders like Fed Governor Waller and Vice Chair Bowman have publicly pushed for a cut, but their voices have not shifted market consensus.
Forecasts Diverge: Analysts Eye $3,220 in 2025 and $3,400 by 2026 as Central Banks Drive Accumulation
A Reuters poll of 40 analysts now pegs gold’s 2025 average price at $3,220 per ounce, up from $3,065 three months ago, with 2026 projections rising to $3,400. The forecast reflects the metal’s resilience as a hedge against fiscal risk, particularly in light of Trump’s recently passed budget package that could inflate national debt by $3.3 trillion. The sentiment is echoed by GoldCore’s David Russell, who suggests $4,000 is plausible by end-2026 should debt risks escalate further. Notably, central banks remain net buyers, with China accumulating for eight straight months and ECB surveys showing that nearly 40% of global reserve managers hold gold to mitigate U.S. sanction exposure in an increasingly multipolar world.
Demand-Supply Balance Shifts as Institutional Accumulation and Retail Demand Diverge
Despite spot gold surging 27% YTD—briefly touching $3,500 in April—analysts warn that upside momentum may stagnate without fresh macro triggers. The short-term consolidation below the April peak reflects fading momentum, but not outright weakness. Physical gold demand, particularly in Asia, remains firm, but ETF inflows have slowed. Central banks, however, are firmly in accumulation mode. FXStreet data from the Philippines confirms relative price stability in local currency, with 1 gram trading at PHP 6,134.56 and 1 troy ounce at PHP 190,806.60. This stability in retail pricing reinforces gold's safe-haven narrative in emerging markets even amid global price volatility.
XAU/USD Lacks Breakout Catalyst Amid Tightening Technical Range and Mixed Momentum
From a structural standpoint, XAU/USD is trapped between conflicting macro and technical crosswinds. The rebound from $3,312 has failed to breach the $3,352 ceiling, while the tightening wedge formed by rising support and declining resistance suggests an imminent breakout. However, without a dovish Fed or surprise geopolitical escalation, gold lacks a clear upward driver. Bearish sentiment could intensify if strong U.S. GDP data or hawkish Fed language emerge midweek. On the flip side, any dovish tilt or downward revision in forward guidance could trigger a sharp spike toward $3,400, particularly as short-covering accelerates above the 200-SMA.
Verdict: XAU/USD is a HOLD as Market Awaits Clear Breakout or Breakdown
Until gold convincingly clears the $3,352 resistance or breaks down through $3,310, a HOLD stance is warranted. Institutional demand and fiscal uncertainty support the long-term thesis, but short-term technicals and macro events are locking XAU/USD in a narrow band. Only a catalyst-driven breakout or failure will justify a directional trade beyond the current compression.
