Gold price touches fresh weekly low, below $3,300 amid easing US-China trade tensions

• Gold price moves away from the all-time peak touched on Tuesday amid receding safe-haven demand.
• Easing US-China tensions remains supportive of the risk-on impulse and weighs on the XAU/USD pair.
• The downside for the commodity seems limited as the USD bulls seem reluctant amid Fed rate cut bets.

Gold price (XAU/USD) extends its steady intraday descent through the first half of the European session and momentarily slips below the $3,300 mark in the last hour as the upbeat market mood conditions undermine demand for safe-haven assets. The global risk sentiment got a strong lift after US President Donald Trump's administration hinted at a potential de-escalation of the tariff dispute with China. Moreover, Trump stepped back from his threats to dismiss Federal Reserve (Fed) Chair Jerome Powell, which, along with easing geopolitical tensions, further boosts investors' confidence and weighs on the precious metal.

Meanwhile, Trump's rapidly shifting stance on trade policies has eroded investors' trust and weakened confidence in the US economy. Furthermore, the prospects for more aggressive policy easing by the Fed fail to assist the US Dollar (USD) to build on its attempted recovery from a multi-year low touched earlier this week and act as a tailwind for the non-yielding Gold price. Hence, it will be prudent to wait for strong follow-through selling before confirming that the XAU/USD has topped out near the $3,500 mark and positioning for deeper losses. Traders now look to the US PMIs and speeches by Fed officials for short-term impetuses.

Daily Digest Market Movers: Gold price extends profit-taking slide amid the upbeat market mood

• US equity indices rose sharply on Tuesday after US President Donald Trump backtracked on his criticism of Federal Reserve Chair Jerome Powell and said that he has no intention of firing him before the expiry of his term in May 2026.
• Adding to this, upbeat comments from Trump administration officials about US-China trade talks further boosted investors' confidence and prompted some profit-taking around the safe-haven Gold price following the recent record run.
• US Treasury Secretary Scott Bessent said that the tariff war between the US and China would de-escalate soon. Later, White House spokeswoman Karoline Leavitt told reporters that the Trump administration is setting the stage for a deal.
• Russian President Vladimir Putin said that he had a positive attitude towards any peace initiatives. In response, Ukrainian President Volodymyr Zelenskyy said on Tuesday that we are ready to sit down in any format after the ceasefire.
• Meanwhile, Trump's rapidly shifting stance on trade policies has eroded investors' trust and weakened confidence in the US economy. This fails to assist the US Dollar in preserving modest Asian session gains and supports the XAU/USD pair.
• Furthermore, the markets have been pricing in the possibility that the Federal Reserve will resume its rate-cutting cycle in June and lower borrowing costs at least three times by the end of this year, further benefiting the non-yielding yellow metal.
• Traders now look forward to the release of global flash PMIs for a fresh insight into global economic health. This, along with trade-related developments, will influence the risk sentiment and provide some impetus to the precious metal.

Gold price technical setup supports prospects for emergence of some dip-buyers below $3,300, or 38.2% Fibo. level

From a technical perspective, the precious metal now seems to have found acceptance below the 23.6% Fibonacci retracement level of the latest leg up from the vicinity of mid-$2,900s, or the monthly swing low. This could be seen as initial signs of possible bullish exhaustion and supports prospects for further losses. However, oscillators on the daily chart are still holding comfortably in positive territory and warrant caution before placing aggressive bearish bets. Hence, it will be prudent to wait for a break below the 38.2% Fibo. level, around the $3,289 region, before positioning for a meaningful corrective fall in the near term.

On the flip side, the $3,370 area (23.6% Fibo. level) now seems to act as an immediate hurdle ahead of the $3,400 mark. Some follow-through buying has the potential to lift the Gold price to the $3,424-3,425 horizontal resistance, above which bulls could make a fresh attempt to conquer the $3,500 psychological mark. A sustained strength beyond the latter will set the stage for an extension of the recent well-established uptrend witnessed over the past four months or so.