Gold News: Bearish Momentum Builds as Dollar Strength Adds Pressure

Gold Under Pressure as Correction Deepens

Gold prices fell more than 1% on Thursday, hitting their lowest level in over a week as a stronger U.S. dollar and investor caution ahead of key inflation data weighed on the metal.

Spot gold crossed below crucial pivots at $2895.29 and $2910.32, turning them into resistance levels. The current bearish momentum points toward potential tests of the next support pivots at $2864.26 and $2843.43, with the 50-day moving average at $2764.91 serving as the last line of defense against deeper losses.

Stronger Dollar Adds to Gold’s Struggles

The U.S. dollar index (.DXY) rose 0.2%, extending its rebound from an 11-week low, and making dollar-priced gold more expensive for holders of other currencies.

Safe-haven demand for the greenback strengthened amid mixed trade signals from U.S. President Donald Trump, who floated a 25% “reciprocal” tariff on European cars and hinted at extending tariffs on imports from Mexico and Canada until April 2. These developments pushed traders towards the dollar, pressuring gold, which was already facing profit-taking from recent record highs.

Markets Eye U.S. Inflation Data for Fed Clues

Investors are closely watching the upcoming Personal Consumption Expenditures (PCE) index set for release on Friday. The PCE monthly index is expected to come in at 0.3%, unchanged from December 2024, according to a Reuters poll.

With several Federal Reserve officials scheduled to speak, traders are searching for signals on future monetary policy. Markets currently anticipate at least two rate cuts this year, with approximately 55 basis points of easing priced in for 2025.

Trump’s Trade Rhetoric Fuels Market Uncertainty

Trump’s shifting stance on tariffs added to the market’s uncertainty. While he suggested a delay in tariffs on Mexican and Canadian goods, a White House official maintained that tariffs remain in effect “as of this moment.” The dollar’s strength also came as the euro dropped 0.1% to $1.0473, and the yen gained ground as U.S. Treasury yields slipped on concerns over U.S. economic growth.

Gold Market Forecast: Bearish Outlook Prevails

The combined impact of a stronger dollar, potential Fed rate cuts, and mixed trade signals suggests a bearish outlook for gold in the short term.

With gold struggling below key resistance levels and downside momentum targeting supports near $2843.43, a break below this level could accelerate losses toward the 50-day moving average at $2764.91. Unless geopolitical risks or significant changes in monetary policy emerge, gold bulls may find it difficult to regain control in the near term.

More Information in our Economic Calendar.