Gold price sticks to strong intraday gains near weekly top; looks to FOMC minutes for fresh impetus

Gold price (XAU/USD) sticks to its strong intraday gains through the first half of the European session and currently trades just above the $3,050 level, or the top end of the weekly range. Growing fears that US President Donald Trump's sweeping reciprocal tariffs would trigger an all-out global trade war and push the world economy into recession provide a goodish lift to the safe-haven bullion.

Apart from this, rising bets for multiple interest rate cuts by the Federal Reserve (Fed) this year, amid worries about a tariffs-driven US economic slowdown, turn out to be another factor driving flows towards the non-yielding Gold price. Furthermore, some follow-through US Dollar (USD) selling contributes to the bid tone surrounding the XAU/USD pair ahead of the FOMC meeting minutes.

Daily Digest Market Movers: Gold price remains well supported by trade jitters, Fed rate cut bets and weaker USD

• The White House press secretary Karoline Leavitt confirmed that the US will proceed with a sweeping 104% tariff on Chinese imports starting this Wednesday. This continues to fuel worries that an all-out trade war would push the global economy into recession, which triggers a fresh wave of the risk-aversion trade and revives demand for the safe-haven Gold price.
• Investors ramped up their bets that a tariffs-driven US economic slowdown could force the Federal Reserve (Fed) to resume its rate-cutting cycle soon. In fact, the CME Group's FedWatch Tool suggests that traders are pricing in over a 60% chance that the Fed will lower borrowing costs in May. Moreover, the US central bank is expected to deliver five rate cuts in 2025.
• This, in turn, drags the US Dollar lower for the second straight day despite the overnight hawkish comments from Fed officials. In fact, San Francisco Fed President Mary Daly said on Tuesday that the policy is in a very good place and modestly restrictive. Daly further noted that inflation pressure from widespread tariffs is an increasing concern.
• Separately, Chicago Fed President Austan Goolsbee said that US tariffs are way bigger than anticipated and pose a real risk to US importers who have very few fallback options. The relationship of sentiment to spending isn't as strong as before and It's not obvious how the Fed would react to negative supply shock, Goolsbee added further.
• Investors now look forward to the release of minutes from the Fed's last policy meeting. Apart from this, the US Consumer Price Index (CPI) and the Producer Price Index (PPI) on Thursday and Friday, respectively, will be scrutinized for cues about the Fed's policy path. This, in turn, will drive the USD in the near term and influence the XAU/USD pair.

Gold price technical setup favors bulls and supports prospects for a move towards reclaiming the $3,100 mark

From a technical perspective, the recent sharp decline from the record high stalled near the 61.8% Fibonacci retracement level of the February-April move-up. The said support is pegged near the $2,957-2,956 area, or a multi-week low touched on Monday and is closely followed by the 50-day SMA, currently around the $2,952 region. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the Gold price to the next relevant support near the $2,920 horizontal zone en route to the $2,900 round figure.

On the flip side, momentum beyond the overnight swing high, around the $3,023 area, could push the Gold price to the $3,055-3,056 barrier. Some follow-through buying should pave the way for a move towards reclaiming the $3,100 mark, with some intermediate hurdle near the $3,075-3.080 region.