Gold experienced intraday selling pressure after reaching a new all-time high on Thursday. A slight rebound in the USD and improved risk appetite contributed to profit-taking in the commodity market. However, ongoing concerns regarding US-China trade relations, potential economic recession, and expectations of Federal Reserve rate cuts may provide underlying support for XAU/USD.
The price of gold (XAU/USD) declined from its recent peak, reaching a daily low near $3,314 during the European session. Optimism surrounding potential US trade negotiations spurred a modest improvement in global risk sentiment. This, coupled with renewed USD demand fueled by positive US Retail Sales data and hawkish comments from Federal Reserve Chair Jerome Powell, triggered profit-taking in the precious metal.
Nevertheless, uncertainty surrounding US President Trump’s tariff policies, the escalating US-China trade dispute, and global recessionary concerns are expected to continue supporting the safe-haven appeal of gold. Furthermore, market expectations that the US central bank will resume its rate-cutting cycle in June, potentially reducing borrowing costs by a full percentage point by year-end, may limit USD appreciation. This factor should mitigate losses for the non-yielding asset, advising caution for bearish traders. Overall, gold’s price is currently influenced by a combination of factors, although downside risks appear to be contained.
