Gold Price Forecast: XAU/USD corrected extreme conditions, struggles around $3,300

XAU/USD Current price: $3,290.46

• US President Donald Trump cooled down concerns about Fed Powell’s continuity.
• Hopes of easing trade tensions between the United States and China lifted the mood.
• XAU/USD corrected extreme overbought readings, sellers paused.

Spot Gold retreats on Wednesday, extending its slump to the $3,260 area during American trading hours. The bright metal fell as the market sentiment improved following United States (US) headlines. US President Donald Trump clarified on Tuesday that he is not willing to fire Federal Reserve (Fed) Chairman Jerome Powell, but that he is frustrated with the decision to maintain interest rates at high levels. Even further, Trump mentioned progress in trade negotiations with China, adding to speculative interests’ relief.

Stock markets reflect the better mood, as Asian and European indexes closed in the green, while Wall Street is firmly up for a second consecutive day, having trimmed all of its Monday losses.

Further optimism came from market talks suggesting the US would lower tariffs on China. Treasury Secretary Scott Bessent on Wednesday said that “there is an opportunity for a big deal” between the two countries, but declined to comment on the tariffs’ levels. He finally added that tariffs will likely have to come down for trade negotiations.

On the data front, S&P Global released the preliminary estimates of the April Purchasing Managers’ Indexes (PMIs), which showed that the manufacturing index improved to 50.7 in April after posting 50.2in March. The Services PMI eased from its previous reading of 54.4 to 51.4, while both indicating expansion in business activity.

XAU/USD short-term technical outlook

The XAU/USD pair bounced from the mentioned low and trades around the $3,290 level. Technical readings in the daily chart suggest Gold may fall further, given that indicators head south almost vertically. Still, as indicators hold within positive levels, the slide could be considered corrective. Even further, the pair develops above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) currently at $3,168.

The near-term picture shows sellers have paused. In the 4-hour chart, technical indicators are losing their bearish momentum near oversold readings, but are still far from suggesting an upcoming recovery. In the meantime, the 20 SMA turned flat, providing resistance in the $3,380 region. Finally, the 100 and 200 SMAs maintain their bullish slopes far below the current level, limiting the case for a steeper decline.

Support levels: 3,283.40 3,260.00 3,247.10

Resistance levels: 3,313.65 3,329.20 3,342.35