Gold price retreats after hitting fresh all-time peak; back below $3,300 ahead of Powell's speech

Gold price (XAU/USD) trims a part of strong intraday gains to a fresh all-time high touched during the first half of the European session and slips back below the $3,300 mark in the last hour. Bulls opt to take some profits off the table amid slightly overbought conditions on short-term charts and ahead of Federal Reserve (Fed) Chair Jerome Powell's comments, which might provide cues about the future rate-cut path. Apart from this, the intraday pullback lacks any obvious fundamental catalyst and is more likely to remain cushioned as persistent trade-related uncertainties might continue to benefit the safe-haven bullion.

Furthermore, the prospects for more aggressive policy easing by the Federal Reserve (Fed), amid growing concerns about a tariffs-driven US economic slowdown, could underpin the non-yielding Gold price. In fact, traders are currently pricing in the possibility of a 100 basis points rate cut by the Fed in 2025. Apart from this, the weakening confidence in the US economy, keeps the US Dollar (USD) depressed near its lowest level since April 2022. This should further contribute to limiting the downside for the XAU/USD, warranting some caution before confirming a near-term top and positioning for any meaningful corrective fall.

Daily Digest Market Movers: Gold price bulls turn cautious ahead of Powell's speech; downside seems limited

• US President Donald Trump took a U-turn last week and abruptly backed off his hefty reciprocal tariffs on most US trading partners for 90 days. Moreover, Trump suggested that he might grant exemptions on auto-related levies after removing smartphones, computers, and some other electronics from steep tariffs on China.
• Trump, however, said that exemptions were only temporary and kept in place 145% duties on other Chinese imports. Trump further promised to unveil tariffs on imported semiconductors over the next week and also threatened that he would impose levies on pharmaceuticals in the not-too-distant future, raising uncertainty.
• China, on the other hand, increased its tariffs on US imports to 125% last Friday, fueling concerns that a tit-for-tat trade war between the world's two largest economies would weaken global growth. This continues to weigh on investors' sentiment and benefits safe-haven assets, lifting the Gold price to a fresh record high on Wednesday.
• Meanwhile, Trump's rapid shifts in tariff announcements have eroded investors' faith in US policies and weakened confidence in the US economy. Adding to this, bets that the Federal Reserve (Fed) will lower borrowing costs by 100 basis points in 2025 sent the US Dollar sharply lower, to its lowest level since April 2022 last week.
• Data released earlier this Wednesday showed that China's economy grew 5.4% in the first quarter from a year earlier, beating expectations. Other Chinese macro data – Retail Sales, Industrial Production, and Fixed Asset Investment – also came in better than estimates, though it was overshadowed by rising trade tensions with the US.
• Investors now await comments from Fed Chair Jerome Powell for more clues on the interest rate path, which will play a key role in influencing the USD price dynamics. Apart from this, trade-related developments should provide some meaningful impetus to the XAU/USD pair, which seems poised to prolong the uptrend.

Gold price setup supports prospects for the emergence of dip-buyers; $3,246-3,245 pivotal support holds the key

From a technical perspective, the Relative Strength Index (RSI) on daily/4-hour charts is flashing slightly overbought conditions and warrants some caution for bullish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further appreciating move for the Gold price.

In the meantime, any corrective pullback might now find some support near the $3,246-3,245 area ahead of the Asian session low, around the $3,230-3,229 region. Any further slide, however, might still be seen as a buying opportunity and is more likely to remain limited ahead of the $3,200 round-figure mark.