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28/04/25
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Gold Prices Under Pressure: Testing Key Support Amid Economic Uncertainty
Gold prices commenced the week with a downturn, currently testing the critical support level of $3,260. The US Dollar is remaining strong due to a combination of short-covering and easing tensions between the US and China over trade, which continues to exert downward pressure on the dollar-denominated gold prices. This comes as traders are realigning their positions ahead of a series of significant economic data releases expected later this week.
As gold struggles to hold its ground, it has once again challenged last week’s low at $3,260 amid growing corrective pressures. Market participants are on edge as they await crucial US economic indicators, particularly the advance Gross Domestic Product (GDP) figures and Nonfarm Payrolls (NFP), both of which are expected to provide insights into the economic health of the United States.
The ongoing easing of US-China trade tensions has shifted the focus back to domestic economic fundamentals, particularly the Federal Reserve’s interest rate outlook. Anticipation regarding these economic indicators is heightened, as a disappointing GDP report could potentially heighten speculation for a reduction in interest rates by the Fed, potentially reviving gold’s upward momentum. Geopolitical factors remain influential, adding complexity to gold price movements.
Recent reports indicate a decline in gold consumption in China, which was down by approximately 6% in the first quarter of the year. Conversely, Chinese gold exchange-traded fund holdings surged nearly 328% year-over-year in the same period, hinting at a dichotomy in consumption and investment demand.
Looking ahead, both gold prices and the US Dollar are expected to remain sensitive to US trade developments as they approach the release of critical economic data. The current technical analysis suggests that a sustained close below the rising trendline at $3,300 could signal a new downtrend, while defense of this level might lead to a rebound and a potential recovery towards recent highs.
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