Gold Price Pulls Back Below $3,300: Key Levels and Macro Data to Watch This Week
Gold (XAU) has retreated from its recent record highs, trading below the $3,300 level as easing US-China trade tensions bolster the USD
Quick overview
- Gold (XAU) has fallen below $3,300 as easing US-China trade tensions strengthen the US dollar.
- China's gold consumption has decreased by over 6% year-on-year, primarily due to a decline in jewelry demand, while investment in gold bars and coins has surged by over 30%.
- Gold is currently testing critical support levels around $3,260, with potential for further declines if this level is breached.
- Upcoming US economic data releases could significantly impact gold's price trajectory, potentially reviving its safe-haven appeal amid recession fears.
Gold (XAU) has retreated from its recent record highs, trading below the $3,300 level as easing US-China trade tensions bolster the US dollar. Traders are closely monitoring upcoming key US economic data releases this week, which could significantly influence Gold’s XAU/USD price trajectory.
Market Sentiment Shifts as Diplomatic Efforts Between World’s Largest Economies Intensify
Yuxuan Tang, strategist at JPMorgan Private Bank, said “headlines over potential, partial exemption in retaliatory tariffs further boosted sentiment today and allowed gold to dip below $3,300 levels.”
Following China’s last week exemption of some American goods from high tariffs, a move meant to help reduce some of the tension developing since President Donald Trump declared wide tariffs earlier this month. Although China has refuted Trump’s assertions that official negotiations are under way, US Agriculture Secretary Brooke Rollins said that “daily conversations” between the two economic giants are under way.
Chinese Consumption Patterns Shifting
The dynamics of the market in China, the biggest gold user in the world, are also changing. The China Gold Association claims that mostly owing to declining demand for gold jewelry, which sank 26.85%, the nation’s gold consumption dropped by over 6% year-on-year to 290.492 tons in the first quarter of 2025.
But consumption of gold bars and coins jumped by over 30% to 138.018 tons, indicating a notable change in consumer behavior as investors look for safe-haven assets in difficult times. This shift from ornamental to investment-oriented gold buying points to ongoing underlying demand even at high prices.
XAU/USD Technical Outlook: Gold at Critical Support Levels
Technically, gold is attempting vital support around $3,260, which was the low for previous week. From a three-week-long ascending channel formation seen on daily charts, the price action points to gold perhaps nearing breakdown.
Still above the midline, the 14-day Relative Strength Index (RSI) is pointing south near 58, therefore confirming the present downward momentum. This technological setup implies that although temporary pressure exists, longer-term optimistic attitude hasn’t entirely disappeared.
Should gold go below the rising trendline support at $3,300, it would confirm a widening channel breakdown and perhaps open the path for an ongoing drop toward the $2,975 level—the beginning point of April’s record surge. If buyers can maintain the present support level, though, a comeback into resistance at $3,370 might occur before perhaps aiming once more at the all-time high.
Dollar Strength Adding Pressure
The US dollar’s appreciation against a basket of key currencies adds to gold’s problems—roughly 0.2% Since gold is valued in dollars, a stronger greenback increases the cost of the precious metal for overseas consumers, usually which results in lower demand.
Tim Waterer, KCM Trade Chief Market Analyst, said “It’s probably fair to say that financial markets and risk-assets in particular are feeling somewhat better about the tariff picture now compared to the frantic first week in April.”
Gold Price Outlook: Key Economic Data Could Reignite Safe-Haven Appeal
Now focusing on three high-impact US economic announcements set for this week, including job openings data on Tuesday, Personal Consumption Expenditures on Wednesday, and the much watched Non-Farm Payrolls report on Friday, are gold traders.
The US runs more danger of recession as Trump’s trade policies cause the world economy to slow down significantly, the International Monetary Fund has previously warned. Should forthcoming economic data disappointments, gold’s safe-haven appeal may be revived even with recent diplomatic advancement.
Gold seems to be in a consolidation period right now, after its explosive climb to record area. Although short-term pressures from bettering US-China relations and a stronger currency weigh on prices, structural elements such geopolitical uncertainty about Ukraine, ongoing inflation concerns, and recession fears continue to provide underlying support for the precious metal.
Technical support levels around $3,260 and future economic data should be attentively watched by investors and traders to ascertain whether the recent correction extends or if dip-buyers intervene to start the uptrend toward new record highs.
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