- Gold prices stabilized on Wednesday, following a slight decline on Tuesday, after U.S. President Donald Trump signed an executive order aimed at easing tariffs on imported automobiles.
- Market participants are keenly anticipating crucial U.S. economic data releases, with the U.S. GDP figure being a primary focus, as it may provide insights into the tangible effects of current tariff policies.
- From a technical analysis perspective, the daily resistance and support levels for Gold are converging, suggesting a heightened probability of a significant price breakout in the near term.
The price of gold (XAU/USD) is maintaining a tight trading range around the $3,300 level on Wednesday, as investors await the release of pivotal U.S. economic data that could potentially trigger a decisive breakout from its current consolidation pattern. Bullion is experiencing a second consecutive day of profit-taking, prompted by U.S. President Donald Trump’s recent executive order designed to alleviate tariffs on imported automotive components. According to a Bloomberg report, the President highlighted the ongoing progress in trade negotiations as a rationale for the tariff adjustments. As indications of easing trade tensions become more prevalent, the upward momentum in gold prices appears to be waning. Furthermore, recent strength in the U.S. dollar is also contributing to the subdued performance of gold.
The economic calendar is dominated by the preliminary release of the U.S. Gross Domestic Product (GDP) for the first quarter. This data point is considered a critical indicator that the Federal Reserve will closely scrutinize when deliberating on its monetary policy stance at the upcoming May 7 meeting regarding interest rates. The market widely expects the Fed to hold rates steady at this meeting, but the GDP data could influence future decisions. The same Federal Reserve and its chairman, Jerome Powell, were once again the target of criticism from President Trump overnight, who asserted that he possesses a superior understanding of interest rates compared to Powell and that Powell is not performing adequately in his role, as reported by Bloomberg. These comments add another layer of uncertainty to the market’s expectations for future monetary policy.
