XAU/USD continues to trade within a tight consolidation zone, currently capped by 50% Fibonacci resistance at $3380.20 and underpinned by support at $3228.38. A break above the $3380.20 level would shift focus back toward the all-time high near $3500.20.
On the downside, gold remains vulnerable to further selling pressure if it drops below $3164.23, with the 50-day moving average at $3067.67 providing deeper support. This moving average has supported the uptrend since early January.
Trade Optimism Dampens Gold’s Appeal
Investor sentiment was buoyed by renewed optimism around trade negotiations. U.S. Treasury Secretary Scott Bessent stated several major trading partners, including India and Japan, had made “very good” proposals to avoid new tariffs.
He added that one of the first bilateral trade deals may be signed with India. Meanwhile, China signaled a more conciliatory stance by exempting certain U.S. goods from retaliatory tariffs. This de-escalation tone pressured gold, as traders rotated out of safe-haven assets.
Dollar Rebound and Data Anticipation Add to Pressure
The U.S. dollar staged a modest recovery on the back of improved risk sentiment and potential de-escalation in trade tensions, further weighing on gold.
Traders are now turning their attention to key U.S. macro data this week, including thePCE price index and Friday’s non-farm payrolls. These releases could provide clarity on the Federal Reserve’s interest rate stance, and any hawkish tilt would likely cap gold upside in the near term.
