Precious metal encounters selling pressure after Thursday's rebound from monthly lows
Improved US-China trade relations reduce immediate safe-haven appeal
Market expectations for Federal Reserve easing continue to cap dollar strength
The Litecoin price newsgold market (XAU/USD) shows hesitation during Asian trading hours as buyers struggle to maintain momentum following Thursday's notable recovery from $3,120 levels. This price zone represented the lowest valuation since mid-April before bulls staged a comeback. Recent developments in US-China trade negotiations have injected optimism into global markets, temporarily reducing the appeal of traditional safe-haven instruments. However, the fundamental backdrop retains supportive elements through ongoing geopolitical tensions and expectations for continued monetary accommodation from the Federal Reserve.
Recent economic indicators from the United States have reinforced market expectations for additional policy easing. Treasury yields continue their downward trajectory, maintaining pressure on the US dollar while creating favorable conditions for non-interest-bearing assets. These dynamics suggest traders should exercise caution before anticipating extended downside in gold prices, particularly given the metal's strong performance throughout 2025. The weekly chart still reflects potential weakness, though the broader technical structure remains constructive above critical support zones.
Market Drivers: Trade Developments Offset By Dovish Fed Expectations
Washington and Beijing agreed to reduce existing tariffs while implementing a 90-day negotiation window to finalize broader trade terms. This development follows additional trade discussions between the US and several Asian economies, reducing immediate concerns about global trade disruptions.
Geopolitical tensions persist despite peace talks between Russian and Ukrainian delegations in Istanbul. The absence of key leadership figures reduces expectations for meaningful progress in resolving ongoing conflicts.
Middle Eastern instability continues as military operations intensify, maintaining a baseline of risk aversion that could resurface to support precious metals during periods of market stress.
Disappointing US economic data reinforces the case for Federal Reserve accommodation, with April's Producer Price Index showing unexpected contraction. This follows softer consumer inflation readings earlier in the week, collectively suggesting easing price pressures.
Retail sales growth slowed considerably during April, registering just 0.1% expansion following March's substantial upward revision. The data supports arguments for slower economic expansion in coming quarters.
Technical Perspective: Critical Resistance Zone Holds The Key
The 4-hour chart reveals fading bullish momentum near the psychologically significant $3,250 region, which coincides with the 200-period moving average. Daily chart oscillators remain in negative territory, suggesting traders should await stronger confirmation before anticipating sustained upside. The current technical setup favors range-bound trading between established support and resistance levels until clearer directional signals emerge.
Immediate support appears near $3,200, with more substantial buying interest likely emerging around $3,178. A breakdown below these levels could accelerate moves toward the weekly low near $3,120, potentially extending toward the $3,100 psychological handle. The broader technical structure would only deteriorate significantly below $3,060, which represents the next major support zone.
Conversely, decisive clearance of the $3,252-3,255 resistance cluster could trigger short-covering momentum capable of propelling prices toward $3,300. This level represents a critical pivot point where sustained trading above would invalidate the near-term bearish technical structure and potentially initiate a new leg higher. Market participants should monitor volume and momentum indicators for confirmation of either scenario.
