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Apr 24, 2025

Currencies

Gold Holds Above $3,300 on Tariff Fears (April 24)

Summary

  • Current Price: ~$3,320
  • Support Levels:
    • $3,300: Key psychological level
    • $3,288: 38.2% Fibonacci retracement
    • $3,260: Recent swing low
    • $3,225–$3,200: 50% Fibo & near-term top confirmation if broken
  • Resistance Levels:
    • $3,367–$3,368: 23.6% Fibo and key pivot
    • $3,400: Round-number target
    • $3,425–$3,427: Intermediate resistance
    • $3,500: Major psychological ceiling

Gold has bounced after holding the 38.2% Fibo support at $3,288, but upward momentum is currently stalling at the $3,367–$3,368 zone. On the daily chart, oscillators remain bullish, suggesting further upside if $3,368 is reclaimed.

Fundamental Factors Affecting Gold

  1. Safe-Haven Demand Reignited
    • Treasury Secretary Scott Bessent’s firm stance on China tariffs has dimmed hopes for a quick deal. This revives demand for gold as a hedge against policy unpredictability and global trade disruptions.
    • Trump’s return to reciprocal tariffs rhetoric reinforces the narrative of prolonged trade tensions.
  2. Fed Policy Outlook Turning Dovish
    • The Fed’s Beige Book pointed to slowing consumer demand, a cooling labor market, and business uncertainty.
    • Markets now price in at least three Fed rate cuts by year-end, beginning in June, supporting gold’s non-yielding appeal.
  3. Mixed Economic Signals
    • S&P Global’s PMI: Slowing service sector activity raises concerns about broader demand.
    • Durable Goods and Jobless Claims (due today) may provide near-term direction.
  4. US Dollar Weakness
    • The USD has pulled back modestly after a two-day recovery.
    • A weaker dollar is gold-positive, reducing the opportunity cost of holding bullion for international investors.
  5. Tempered Risk Appetite
    • Despite a general risk-on mood, uncertainty around Fed independence, tariffs, and global growth risks keep markets cautious.
    • This limits risk asset upside and provides underlying support to gold.

Key Takeaway for Traders

  • Bullish Bias Holds, but $3,368 is a key ceiling in the short term.
  • Traders should watch for a clean break above $3,368 to target $3,400 and $3,425.
  • Failure to hold $3,300–$3,288 opens the door to $3,260 and $3,225 on deeper correction.
  • For Forex traders:
    • A weakening USD, dovish Fed bets, and persistent trade uncertainty fuel XAUUSD gains.
    • If US data disappoints, gold may push higher.
    • However, stronger-than-expected figures could stall or reverse gold’s momentum by firming USD and risk sentiment.

XAUUSD – H2 Timeframe

XAUUSDH2.png

Reacting to the trendline support, the price action on the 2-hour timeframe chart of XAUUSD gave a bullish break of structure with a gap. This shows that we can expect a show of strength from the highlighted demand zone.

XAUUSD – H1 Timeframe

XAUUSDH1.png

The 1-hour timeframe chart of XAUUSD shows the SBR pattern formed as the price movement pushed into the 100-period moving average support and the trendline support. In conjunction with the higher timeframe criteria, my conclusion favors continued bullish price action.

Analyst’s Expectations: 

Direction: Bullish

Target- 3409.99

Invalidation- 3259.80

CONCLUSION

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Trading foreign currencies on margin involves significant risks and may not be suitable for everyone, as high leverage can increase both potential gains and losses. Before entering the foreign exchange market, it is essential to evaluate your investment goals, personal experience, and risk tolerance.

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Adetola-Freeman Ogunkunle

Author: Adetola-Freeman Ogunkunle

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