Gold price headed downward on Friday, retreating further from record highs, ignoring an escalation of a global trade war. Spot market gold traded at $3,071 and was down by 1.39% at the time of writing, hours after China announced retaliatory tariffs against the United States.
The risk sentiment has put traders in a precarious position, with gold’s upside limited by the belief that the US will ultimately enter negotiations with its trading partners. Pressure is mounting on the world’s largest economy, with many analysts forecasting a recession.
That view has just been affirmed by the weak jobs data released on Friday. US Non Farm Payroll numbers printed out strongly in March at 228k against the median forecast figure of 137k, and rising substantially from February’s 117k. However, unemployment rate grew by 4.2, exceeding analysts’ forecast rate of 4.1%.
The hash business environment created by tariffs could exacerbate matters further, putting pressure on the US dollar. The demand for bullion gold will likely rise significantly in the coming weeks as more investors dump the dollar due to a weak outlook of the US economy.
Also, gold price upside is supported by the rising likelihood that the Federal Reserve could announce an interest rate cut in May to absorb the impact of trade tariffs on the economy.
Pivot: Gold price pivots at $3,074 and the momentum currently favours the downside. The downward action will likely find the first support at $3,048. If that momentum strengthens, the price will break below that level and test the second support at $3,024.
Alternatively, action above the pivot level will favour the buyers to be in control. The upward momentum will likely meet the first barrier at $3,091, but an extended control by the buyers will breach that mark and invalidate the downside narrative. Furthermore, the resulting momentum could send the XAUUSD pair higher to test $3,110.
This post was last modified on Apr 04, 2025, 15:17 BST 15:17