XAU/USD Finds Support as Dollar Wobbles, Fed Easing Bets Resurface

Commodity

Summary:

Gold prices climb back above $3,300 as renewed safe-haven demand returns on the back of fading US-China trade optimism, weakening US economic data, and heightened expectations for Federal Reserve rate cuts.

BUY XAUUSD

Close Time

CLOSED

3339.99

Entry Price

3500.00

3240.00

4342.68 +43.29 +1.01%

12.7

Pips

Profit

3240.00

3341.26

Exit Price

3339.99

Entry Price

3500.00

The price of gold (XAU/USD) is regaining its luster, rallying above the $3,300 level in early European trading on Thursday, as investors recalibrate their expectations amid a complex mix of geopolitical tensions, dovish central bank bets, and a shaky US economic outlook. After a modest pullback from record highs earlier in the week, bullion has found its footing again, driven by renewed safe-haven flows following cautious comments from top US officials and fresh signs of a slowing US economy.

Gold’s renewed bullishness is underpinned by remarks from US Treasury Secretary Scott Bessent, who poured cold water on market hopes for an imminent breakthrough in US-China trade relations. On Wednesday, Bessent firmly denied rumors that the White House is considering unilateral tariff rollbacks on Chinese goods. Instead, he emphasized that any reductions would need to be mutual a position that suggests the trade deadlock may persist longer than markets previously expected. The resulting uncertainty has once again positioned gold as a prime hedge against geopolitical and economic instability.

At the same time, the Federal Reserve’s latest Beige Book painted a less-than-rosy picture of the US economy. The report highlighted increasing concerns over President Trump’s erratic tariff strategies and their chilling effect on business sentiment. Moreover, it noted that consumer spending remains uneven, and labor markets long considered a pillar of US resilience are beginning to show signs of fatigue. Several Fed districts reported stagnating or even declining employment trends, bolstering the argument that the US economy may be approaching a period of deceleration.

Further stoking demand for gold is a weakening US Dollar, which has given up a portion of its recent gains. The greenback’s retreat follows growing speculation that the Fed could resume its rate-cutting cycle as early as June, with markets currently pricing in at least three cuts by year-end. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, increasing their relative attractiveness in investor portfolios.

Despite these supportive macro factors, gold’s ascent has not been without resistance. A generally positive tone in broader markets fueled in part by tentative signs of easing trade tensions and confidence in the Fed’s independence has capped bullion’s gains for now. Equities remain buoyant, reflecting investors’ hope that any downturn in US growth will be met with swift policy intervention.

But in our view, this optimism may be overstretched. With each new economic data release pointing to waning momentum, the question isn’t whether the Fed will cut rates but rather how aggressively it will act. Already, preliminary S&P Global PMI readings for April suggest uneven expansion across sectors. While manufacturing has managed to stay in growth territory, the services sector arguably the backbone of the post-pandemic recovery appears to be losing steam.

Against this backdrop, gold remains an attractive proposition. The ongoing ambiguity surrounding monetary policy and the fragility of trade negotiations continue to elevate downside risks for risk assets, while providing a tailwind for safe havens.

Technical Analysis

From a technical perspective, gold’s rebound from the $3,290 support level appears to be gaining traction. This level has acted as a strong floor, reinforced by the 50-period EMA on the 4-hour chart, which provided a double layer of support and helped reverse the recent corrective dip. Adding further conviction to the bullish setup is a positive divergence on the Relative Strength Index (RSI), signaling that downside momentum may have been exhausted.

Currently, immediate resistance is seen at $3,340 the mid-channel level on the 4-hour timeframe and a prior congestion zone. A successful break above this region could open the door to $3,360, with the next major psychological target at $3,380. Beyond that, if momentum persists and macro conditions align, $3,500 remains a potential medium-term target.

On the downside, the key area to watch is the $3,320–$3,330 support zone. A sustained drop below this range could bring $3,300 back into play and even invite further profit-taking. However, as long as prices remain above $3,320, the short-term bias remains bullish.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3340

STOP LOSS: 3240

TAKE PROFIT: 3500

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Silver prices slipped nearly 1% on Thursday, falling to around $33.30 per ounce as traders took profits following a sharp rally in the previous session.

BUY XAGUSD

Close Time

CLOSED

33.400

Entry Price

34.500

31.900

63.270 +1.343 +2.17%

150.0

Pips

Loss

31.900

31.897

Exit Price

33.400

Entry Price

34.500

Silver (XAG/USD) prices retreated on Thursday, dipping by close to 1% to trade around $33.30 per ounce in what appears to be a textbook technical correction following a strong 3.1% rally the previous day. That surge had propelled the metal to a three-week high, driven largely by safe-haven buying and renewed interest in precious metals amid global macroeconomic uncertainty. However, the latest downturn underscores silver’s notoriously volatile nature one that reflects its dual identity as both a precious metal and an industrial commodity.

While gold has traditionally served as the flagship safe-haven asset in times of uncertainty, silver often carves its own path, influenced not only by monetary policy and inflation expectations but also by industrial demand and broader economic sentiment. That divergence has become increasingly apparent over recent sessions, as gold prices maintained gains while silver corrected sharply, indicating investors may be recalibrating expectations amid evolving geopolitical dynamics.

At the center of this recalibration is the shifting narrative around US-China trade relations a key driver for industrial metals like silver, which are heavily reliant on the global manufacturing and electronics sectors. Earlier in the week, markets were buoyed by reports suggesting that the Trump administration is weighing potential tariff cuts as a prelude to restarting stalled negotiations with Beijing. That optimism, however, was quickly tempered when US Treasury Secretary Scott Bessent dismissed reports of any imminent or unilateral tariff rollbacks.

Bessent clarified that while the White House remains open to talks, formal discussions have not yet begun, and no concrete steps have been taken toward easing existing duties. Adding to the uncertainty, Chinese officials have reportedly conditioned any renewed engagement on a clear pause in US threats another sign that trade rapprochement may remain elusive in the near term.

Technical Analysis

From a technical perspective, silver’s latest decline appears to be a healthy pullback after an overextended rally. The price is now approaching a key support level at $32.95 a previously tested pullback area that could provide a springboard for renewed bullish momentum. This level also coincides with a near-term rising trendline and is supported by recent price action, reinforcing its significance.

A break below this level, however, could open the door to deeper losses, with $31.90 acting as the next major support. This area aligns with a multi-swing low and the 23.6% Fibonacci retracement of the recent rally, making it a crucial inflection point. On the upside, resistance is eyed at $34.48, a level that capped price gains in late March and now stands as a key barrier to a sustained recovery.

Technical traders are watching these levels closely, with many eyeing $32.95 for potential long entries, placing stops at $31.90 and targeting the $34.50 region for profit-taking.

TRADE RECOMMENDATION

BUY SILVER

ENTYR PRICE: 33.40

STOP LOSS: 31.90

TAKE PROFIT: 34.50

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Crude oil prices slipped on Wednesday after reports revealed that OPEC+ is considering another production increase in June, reigniting supply concerns.

SELL WTI

Close Time

CLOSED

62.200

Entry Price

56.000

66.000

57.506 +0.273 +0.48%

52.4

Pips

Profit

56.000

61.676

Exit Price

62.200

Entry Price

66.000

Global crude oil prices extended their decline on Wednesday, weighed down by renewed concerns over a potential supply glut after sources indicated that OPEC+ is preparing to increase output again in June. This comes on the heels of last month’s controversial decision by the oil-producing alliance to raise output by 411,000 barrels per day (bpd), a move that caught many market participants off guard and contributed to oil’s fall to four-year lows in April.

Three sources familiar with the matter told Reuters that several members of the OPEC+ alliance, led by Saudi Arabia and Russia, are preparing to propose another output hike when the group meets next month. While the discussions are still preliminary, the sentiment within the group appears to be shifting toward a more proactive stance on production, despite weakening global demand signals and price instability.

Brent crude futures for June delivery dropped 2% to $66.10 per barrel as of 15:05 GMT, while West Texas Intermediate (WTI) contracts for the same month fell 2.2% to settle at $62.30 per barrel. The market reaction was swift and pronounced, as traders reassessed supply-demand balances amid a fragile economic backdrop.

The renewed supply risks arrive at a time when the global oil market remains vulnerable to both macroeconomic and geopolitical pressures. The ongoing uncertainty surrounding the US-China trade relationship continues to cloud demand forecasts. Although some progress has been made, recent rhetoric from both sides has dimmed hopes for a near-term resolution, and with global manufacturing and shipping activity already on the back foot, the appetite for oil may not rebound as quickly as expected.

Further compounding the bearish sentiment was data released by the US Energy Information Administration (EIA), which showed a surprise build in US crude oil inventories. Stocks rose by 0.2 million barrels last week to reach a total of 443.1 million barrels, defying analyst expectations for a more substantial 0.6 million barrel increase.

While the build in crude stocks was modest, it underscored the prevailing theme of oversupply, particularly at a time when seasonal demand trends would typically encourage drawdowns. Gasoline inventories declined by 4.5 million barrels to 229.5 million barrels, reflecting some signs of healthy consumer activity. However, distillate fuel stocks also fell by 2.4 million barrels to 106.9 million barrels, a signal that industrial demand remains uneven and may not be robust enough to support sustained price recovery.

Technical Analysis

From a technical perspective, crude oil has resumed a bearish stance after briefly consolidating near the crucial support zone at $61.50. Price action in recent sessions has shown clear signs of hesitation and indecision, leaning heavily on the support provided by the 50-period Exponential Moving Average (EMA50). While this level has thus far acted as a buffer against deeper losses, its resilience is increasingly under threat.

A rising wedge pattern a traditionally bearish formation has emerged on the short-term charts, indicating a potential breakdown scenario. This is being confirmed by negative divergences on the Relative Strength Index (RSI), which has failed to show any meaningful bullish momentum even during brief price rebounds. Should oil break decisively below $61.50, the next major support lies around the psychological $60.00 handle, with downside risks increasing significantly thereafter.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 62.20

STOP LOSS: 66.00

TAKE PROFIT: 56.00

Risk Warnings and Disclaimers

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Manuel

Commodity

Forex

Summary:

This area may serve as a trigger for renewed bearish momentum, as price action has already shown signs of rejection near this level.

SELL AUDCAD

Close Time

CLOSED

0.88305

Entry Price

0.85950

0.89900

0.91459 -0.00137 -0.15%

7.1

Pips

Profit

0.85950

0.88234

Exit Price

0.88305

Entry Price

0.89900

The Reserve Bank of Australia (RBA) remains cautious in its policy stance, reflecting the ongoing uncertainty surrounding the country’s economic outlook. Minutes from the RBA’s meeting held March 31–April 1 show that while the upcoming May meeting could serve as a juncture for potential policy reassessment, no firm commitments have been made regarding future rate adjustments.

This measured approach stems from a combination of mixed economic signals. Although the unemployment rate edged up slightly to 4.1% in March—just shy of the 4.2% market forecast—the employment change came in at 32.2K, missing the 40K estimate. These figures suggest a potential loss of momentum in the labor market. Additionally, the Westpac Leading Index, which gauges future economic activity, slowed to 0.6% in March from 0.9% in February, signaling subdued economic momentum.

The RBA emphasized that both upside and downside risks remain in play, reinforcing its data-driven and balanced outlook on inflation and growth.

In contrast, the Bank of Canada (BoC) has also adopted a more reserved tone, shifting from a previously “moderate” stance to a more cautious, wait-and-see approach. This change comes as Canadian policymakers navigate heightened uncertainty stemming from shifting U.S. trade policies under former President Donald Trump—factors that continue to cast a shadow over both global and domestic growth prospects.

In its latest Monetary Policy Report, the BoC outlined two divergent paths:

Optimistic scenario: If trade disputes ease and tariffs are rolled back through negotiations, Canada could see a temporary slowdown, with inflation dipping to 1.5% before returning to the 2% target.

Pessimistic scenario: A prolonged trade conflict could push Canada into recession territory, with inflation surging above 3% by mid-2026 before gradually stabilizing.

Acknowledging these risks, the BoC held its benchmark interest rate steady at 2.75%, halting a streak of seven consecutive rate cuts that began in June 2024. Governor Tiff Macklem emphasized the need for prudence, noting that the bank would scale back forward guidance until greater clarity emerges. He pointed to recent signs of slowing business investment and weakened household consumption—both likely exacerbated by ongoing U.S. retaliatory tariffs. Clear Divergence Signals Potential Downturn for AUDCAD_1

Clear Divergence Signals Potential Downturn for AUDCAD_1

Technical Analysis

The AUDCAD pair has staged a notable rebound from its recent low of 0.8438, climbing as high as 0.8902 in the previous session. The price came close to testing the 100-period moving average, currently positioned at 0.89094. This area may serve as a trigger for renewed bearish momentum, as price action has already shown signs of rejection near this level. If the moving average holds as resistance, a fresh downside move could unfold.

A key technical signal reinforcing this bearish outlook is the presence of negative RSI divergence. While price failed to surpass its previous swing high, the RSI has risen to a new local peak—signaling waning bullish momentum. This type of divergence, especially when it occurs near a key resistance level, often precedes a pullback or trend reversal.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8830

Target price: 0.8595

Stop loss: 0.8990

Validity: May 02, 2025 15:00:00

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices saw a dramatic reversal, plunging over 5% after hitting a historic high of $3,500, as market sentiment pivoted sharply following U.S. President Donald Trump’s unexpected dovish tone on tariffs and the Federal Reserve.

SELL XAUUSD

Close Time

CLOSED

3280.00

Entry Price

3170.00

3350.00

4342.68 +43.29 +1.01%

700.0

Pips

Loss

3170.00

3350.01

Exit Price

3280.00

Entry Price

3350.00

Gold (XAU/USD), the quintessential safe-haven asset, has suffered a significant sell-off after reaching a new all-time high of $3,500 earlier this week. By Wednesday afternoon, the yellow metal had tumbled more than 5%, falling to around $3,322, with momentum suggesting more downside potential. This sharp reversal comes in the wake of surprising political and economic comments from U.S. President Donald Trump that have dramatically shifted investor sentiment across global markets.

On Tuesday, gold basked in the glow of geopolitical uncertainty and persistent fears of a slowing global economy, bolstered by central banks' aggressive buying and rising investor demand for safe-haven assets. But in a stunning about-face, President Trump appeared to flip the narrative entirely.

Speaking late Tuesday, Trump reversed his earlier combative stance toward both China and the Federal Reserve. In a series of statements reported by Bloomberg and the Wall Street Journal, the President confirmed that Federal Reserve Chair Jerome Powell would remain in his post—putting to bed lingering speculation about Powell's job security. Just months ago, Trump was openly criticizing Powell for not cutting interest rates aggressively enough.

More strikingly, Trump extended an olive branch to Beijing, stating that he would be “very nice” in future trade talks and that any finalized tariff regime would be significantly lower than the previously floated 145%. This signal of possible de-escalation in U.S.-China trade tensions ignited risk appetite across the board, sending equities and U.S. Treasury yields higher and relegating gold to the sidelines.

This sudden shift in political rhetoric has caught markets off guard. Investors, previously positioned defensively amid expectations of prolonged monetary easing and trade conflict, are now unwinding those trades. The result has been a robust rally in equities and fixed income, while safe-haven plays like gold have been punished.

Tesla CEO Elon Musk added a quirky subplot to the mix, announcing that he will reduce his role at the Department of Government Efficiency (DOGE), a move that markets largely shrugged off but added to the flavor of a day defined by political oddities and policy surprises.

Despite the sharp drop, the broader outlook for gold may still be constructive over the long term. Renowned hedge-fund billionaire John Paulson told Reuters that central banks are expected to continue buying gold to diversify away from fiat currencies amid ongoing political and economic uncertainty.

“Even with this sell-off, gold remains a key strategic hedge,” Paulson said. “The geopolitical landscape is still unstable, and inflation pressures haven’t vanished.”

Bloomberg reports that many investors continue to view the dip as a tactical pullback rather than a structural shift. Gold has underperformed relative to Bitcoin in recent sessions, but many analysts expect the metal’s long-standing reputation for safety to sustain demand over time, particularly if political rhetoric proves unreliable or transient.

Technical Analysis

From a technical standpoint, gold’s current price action suggests that the correction is far from over. After reaching the $3,500 milestone, momentum faded quickly, giving way to heavy selling that sliced through key support levels at $3,400 and $3,300, with prices briefly dipping to a session low of $3,290.

Wednesday’s candlestick a large bearish body signals ongoing downside pressure. The failure to hold above $3,300 underscores the fragility of the recent rally, and the chart now paints a picture of a market under siege from profit-taking and shifting macro sentiment.

Short-term traders are eyeing resistance at the $3,320–$3,330 zone, while support lies in the $3,245–$3,170 region. For now, a strategy of “shorting the rallies” seems prudent, with a close watch on any signals of renewed geopolitical tension or Fed dovishness that could reignite demand.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3280

STOP LOSS: 3350

TAKE PROFIT: 3170

Risk Warnings and Disclaimers

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Eva Chen

Economic

Forex

Summary:

Following an initial surge, the U.S. dollar subsequently retraced its gains, causing the USDCAD to pull back to the vicinity of 1.3780. A break below the ascending trendline near 1.3800 could potentially trigger a significant bearish move.

SELL USDCAD

EXP

EXPIRED

1.39700

Entry Price

1.34500

1.40800

1.37639 -0.00061 -0.04%

Pips

EXPIRED

1.34500

1.39164

Exit Price

1.39700

Entry Price

1.40800

Fundamentals

The USDCAD has recently been trading within a range of 1.3780–1.3868. The Canadian dollar has strengthened due to easing global trade tensions and a significant rise in oil prices. Meanwhile, the Federal Reserve's maintenance of elevated interest rates, coupled with the Bank of Canada's decision to hold off on rate cuts during its April meeting, has kept the interest rate differential relatively stable. Further support for the Canadian dollar is likely if the Federal Reserve maintains its high-interest-rate policy or if oil prices remain elevated. Conversely, a significant weakening of U.S. economic indicators could see the USDCAD retest levels above 1.4000.

Federal Reserve officials have recently expressed concerns about the dual impact of trade tariffs on inflation and economic growth. Minneapolis Fed President Kashkari believes it is premature to determine the future interest rate path before the full effects of the tariff impacts are realized.

Similarly, Governor Kugler noted that factors such as import tariffs are pushing up short-term inflation expectations, leading to a preference for maintaining the policy interest rate unchanged within the 4.25%–4.50% range during this meeting.

On April 16, the Bank of Canada held the overnight rate steady at 2.75%, marking the first pause following seven consecutive rate cuts, and signaled its readiness to "act decisively" to maintain its inflation target. The policy statement also acknowledged that ongoing trade tensions could exacerbate the risk of an economic slowdown, leading to a more cautious forward guidance.

As an oil-exporting nation, the Canadian dollar is highly sensitive to oil prices. On April 22, international oil prices surged nearly 2% in a single day, reaching US$64.31 per barrel. Consequently, the Canadian dollar strengthened, rising 0.2% to 1.3816. Macroeconomic data indicates a strong negative correlation between the USDCAD and oil prices, with rising oil prices typically corresponding to a weakening of the exchange rate.

Technically Analysis

The USDCAD is likely to experience further downside movement, with the minor resistance level at 1.3868 remaining unbroken. A break below 1.3780 would likely signal a continuation of the bearish trend. On the upside, a breach of the 1.3868 resistance level would shift the intraday bias to bullish, potentially triggering a more robust rally.

Considering both fundamental and technical factors, the current bias leans towards a bearish outlook. However, it is crucial to monitor oil price fluctuations, as well as future decisions and economic data releases from the central banks of the U.S. and Canada. Strict risk management is essential in executing trading strategies to capitalize on opportunities arising from currency volatility.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.3970

Target Price: 1.3450

Stop Loss: 1.4080

Valid Until: May 8, 2025 23:55:00

Support: 1.3780, 1.3750, 1.3649

Resistance: 1.3868, 1.3968, 1.3920

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

The AUDUSD experienced a pullback on Wednesday. The Australian Composite PMI for April declined to 51.4, indicating emerging cost pressures. The AUDUSD encountered significant resistance at its 200-day SMA.

BUY AUDUSD

Close Time

CLOSED

0.64341

Entry Price

0.68000

0.62000

0.66446 -0.00074 -0.11%

17.2

Pips

Loss

0.62000

0.64169

Exit Price

0.64341

Entry Price

0.68000

Fundamentals

The preliminary readings for Australia's April PMI, released on Wednesday, indicated a sustained expansion in the private sector, thereby providing support for the Australian dollar, albeit at a decelerated pace. The Manufacturing PMI declined to 51.7 from 52.1, while the Services PMI decreased to 51.4 from 51.6. Consequently, the Composite PMI also experienced a slight dip, moving from 51.6 to 51.4.

Despite this marginal contraction, S&P Global's Jingyi Pan highlighted that domestic demand continues to serve as a "robust underpinning" for business activity, fostering further job creation across various sectors. The data suggests a solid start to the second quarter, buoyed by internal momentum despite increasing external headwinds.

However, the impact of U.S. tariffs is beginning to surface. Export performance has weakened, with manufacturers reporting "intensified cost pressures" due to exchange rate volatility.

In response, numerous companies are passing on these elevated costs to consumers, resulting in the highest increase in overall selling prices in nine months.

MARKET WATCH: We anticipate that the market will encounter considerable challenges within this environment, as investors must assess the capacity of the Australian economy to perform effectively under these conditions. This is particularly crucial given the potential ramifications of a large-scale tariff war on global trade, which may not be advantageous for Australia, primarily due to its close economic ties with China. China supplies substantial raw materials to this extensive manufacturing economy, which are utilized not only for the production of goods but also for the development of this rapidly expanding emerging market over the past few decades.

A Pullback that Holds above Key Support Levels Will Lead to a Retest of the 200-day SMA_1

Technical Analysis

The AUDUSD has staged a robust recovery following its early-month dip to a post-pandemic low of 0.5910. Currently, the bulls have breached the February peak but are encountering resistance at the 200-day SMA, positioned at 0.6470. A successful breach of this SMA could catalyze a more substantial rally.

The subsequent target is 0.6550, representing the 61.8% Fibonacci retracement from the previous year, and 0.6640. The short-term support level is identified at last week's low of 0.6270.

That being said, given the overbought daily stochastic and the presence of significant resistance levels, a temporary pullback in the AUDUSD is anticipated, potentially towards the 0.6348 level, or the 0.38 retracement at 0.6300. A hold above these levels would likely see the market resume its upward trajectory.