Gold price slips below $3,200 mark, fresh daily low amid positive risk tone

• Gold price meets with a fresh selling pressure and erodes a part of Thursday’s recovery gains.
• The US-China trade deal optimism continues to act as a headwind for the safe-haven commodity.
• Fed rate cut bets keep the USD depressed and should help limit losses amid geopolitical risks.

Gold price (XAU/USD) extends its steady intraday descent through the first half of the European session on Friday and slides back below the $3,200 mark in the last hour. The latest optimism over the US-China trade truce continues to undermine demand for traditional safe-haven assets and fails to assist the bullion to capitalize on the previous day's solid recovery move from the $3,120 area, or over a one-month low.

Thursday's softer US macro data reaffirmed bets for more interest rate cuts by the Federal Reserve (Fed) and led to a further decline in the US Treasury bond yields. This keeps the US Dollar (USD) on the defensive for the second straight day, though it fails to lend any support to the non-yielding Gold price. Event geopolitical risk does little to dent the intraday bearish sentiment surrounding the XAU/USD pair.

Daily Digest Market Movers: Gold price bears retain control amid receding demand for safe-haven assets

• The US and China agreed to significantly lower tariffs and initiated a 90-day pause to finalize a broader deal, marking a de-escalation of a disruptive standoff between the world's two largest economies. Moreover, US President Trump pointed to ongoing negotiations with India, Japan, and South Korea.
• Negotiators from Russia and Ukraine, as well as a delegation from the US, are currently in Istanbul, Turkey, for the first direct peace talks in three years. However, Russian President Vladimir Putin's absence has already dashed hopes for any breakthrough toward ending the prolonged war.
• Meanwhile, Israel’s military intensifies its carnage across the Gaza Strip since dawn on Thursday, and the relentless assault, so far, has killed at least 143 Palestinians. This keeps geopolitical risks in play, which, along with the lack of any US Dollar buying interest, could support the safe-haven Gold price.
• A duo of weaker economic reports released from the US on Thursday reaffirmed market bets for more interest rate cuts by the Federal Reserve this year. This, in turn, dragged the US Treasury bond yields sharply lower and undermined the buck, lending some support to the non-yielding yellow metal.
• The US Producer Price Index for final demand fell 0.5% in April, marking the first monthly decline since 2023. This comes on top of softer US Consumer Price Index (CPI) on Tuesday, which rose at the lowest annual rate since February 2021, and further pointed to signs of easing inflationary pressures.
• Separately, the US Department of Commerce reported that Retail Sales rose 0.1% in April compared to the previous month's upwardly revised growth of 1.7%. This increases the likelihood that the US economy will experience several quarters of sluggish growth and reaffirms dovish Fed expectations.

Gold price could accelerate the intraday downfall once the $3,178-3,177 support is broken decisively

From a technical perspective, the goodish recovery move from over a one-month low falters near the 200-period Simple Moving Average (SMA) on the 4-hour chart, around the $3,252-3,255 zone, amid still negative oscillators on the daily chart. This makes it prudent to wait for strong follow-through buying before confirming that the XAU/USD pair's downfall witnessed over the past week or so has run its course and placing fresh bullish bets.

In the meantime, weakness back below the $3,200 mark might now find some support near the $3,178-3,177 region. Some follow-through selling could make the Gold price vulnerable to accelerating the slide back towards the overnight swing low, around the $3,120 area. The downward trajectory could extend further towards the $3,100 mark en route to the next relevant support near the $3,060 region.

On the flip side, the $3,252-3,255 area might continue to act as an immediate hurdle. A sustained strength beyond might trigger a fresh bout of short-covering rally and allow the Gold price to reclaim the $3,300 mark. The latter should act as a pivotal point, which, if cleared decisively, could negate any near-term negative bias and shift the bias in favor of bullish traders, paving the way for further gains.