GOLD re-attempts $3,400; US trade talks in focus

• Gold price challenges $3,400 again as US trade talks grab attention.
• The US Dollar returns to the red after the Fed raises concerns over economic uncertainty.  
• Gold price yearns for acceptance above $3,435 for a sustained upside.

The gold price is back on the bids early Thursday, challenging the $3,400 mark amid renewed weakness in the US dollar and a revival of safe-haven demand.

Markets remain broadly upbeat due to China’s cut in the Reverse Repo Rate and in anticipation of US President Donald Trump’s expected announcement of a major trade deal. The Wall Street Journal (WSJ) and the New York Times cited that Trump is likely to announce a framework of a trade deal with the UK later in the American morning on Thursday.

However, the optimism fails to lift the sentiment around the US Dollar (USD) as the US Federal Reserve (Fed) voiced its concerns over the heightened economic uncertainties in the face of Trump’s erratic trade policies.The Fed kept the federal funds rate unchanged in the range of 4.25% to 4.50% on Wednesday, maintaining a cautious stance on the policy outlook. The Fed’s policy statement read that risks of higher inflation and unemployment had risen, further clouding the US economic outlook.

Further, Gold price continues to derive support from safe-haven inflows, courtesy of the ongoing geopolitical tensions in the Middle East and between Russia and Ukraine. Meanwhile, Oman said on Wednesday that it brokered a truce between Washington and Houthis, saying neither side will target the other. In the Asian sub-continent, Heavy exchanges of artillery fire have been reported along the Line of Control (LoC) dividing Indian- and PoK, according several media outlets.

Amidst heightened trade uncertainties and geopolitical risks, Gold price is likely to remain the go-to safety net for investors. They keenly await the US-Sino trade talks from May 9 to May 12 in Geneva, especially after US President Trump said Wednesday that there is no potential for pulling back 145% tariffs on China.

Any retracement in Gold price due to optimism over potential US trade deals will remain a good dip-buying opportunity as policymakers globally grapple with the impact of Trump’s tariffs. The daily technical setup also remains favourable for Gold buyers in the near term.

Daily technical analysis

Gold price is poised to retake the channel support (now resistance) after finding buyers once again near $3,360.The 14-day Relative Strength Index (RSI) appears bullish, as it remains above the midline near 62, suggesting that further upside remains in the offing.

Gold price must establish a firm foothold above the two-week high of $3,435 for a sustained upside momentum. The next topside target is at the record high of $3,500. Further up, the channel support (now resistance) at $3,525 will be on buyers’ radars.

On the downside, the $3,360 is the initial support line, below which the 21-day Simple Moving Average (SMA) at $3,301 will be tested. Deeper declines will challenge the May 2 low of $3,223.