Gold (XAU) Daily Forecast: U.S.-China Trade Tensions Add Pressure to Gold Outlook

Market Overview

Gold (XAU/USD) concluded the week in decline, trading around $2,688.18 after hitting an intra-day low of $2,691 on Friday. The recent slide in gold prices is largely due to a strengthening U.S. dollar, buoyed by investor expectations that economic policies under former President Donald Trump may spur growth and inflation.

This rise in the dollar typically makes dollar-denominated assets like gold less attractive to global investors, reducing demand for the precious metal.

The Federal Reserve’s recent decision to cut interest rates by 25 basis points, setting the target range to 4.50%-4.75%, further affected gold’s safe-haven status. Fed Chair Jerome Powell’s comments also suggested that more rate cuts might be on the horizon to counter economic pressures, boosting the dollar and impacting gold demand.

According to the CME Group’s FedWatch Tool, traders are pricing in a 75% likelihood of another rate cut in December, which could influence treasury yields and potentially draw funds away from non-yielding assets like gold.

Investor Sentiment Shifts Amid Economic Data

The risk-on sentiment in broader markets, spurred by optimism over Federal Reserve support and potential fiscal measures in China, contributed to the pullback in gold.

Traders are looking to upcoming U.S. data releases, including the Michigan Consumer Sentiment Index and Inflation Expectations report, as indicators of short-term market direction.

These data points could influence the dollar’s strength and, in turn, gold’s appeal.

China’s Economic Strength and Trade Tensions

On the global front, China’s trade surplus expanded significantly in October to $95.27 billion, with exports growing by 12.7% year-over-year while imports dropped by 2.3%.

This strong trade performance suggests robust economic momentum in China, potentially influencing Chinese demand for gold.

Additionally, tensions over proposed U.S. tariffs on Chinese goods could introduce further market uncertainty, increasing gold’s appeal as a safe-haven asset should trade frictions escalate.

In the current environment, gold’s price trajectory remains intertwined with U.S. dollar movements, Federal Reserve policy, and global trade developments, as investors seek signals for the precious metal’s near-term direction.

Short-Term Forecast

Gold’s short-term technical outlook remains bearish as it trades near the $2,684 pivot. A drop below $2,668 support could intensify selling, while resistance at $2,696 caps potential gains.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,688.18, down 0.68% and hovering near a critical pivot point at $2,684.08. This level is significant—staying below it could keep the bearish trend intact, with immediate support at $2,668.38 and further down at $2,654.34.

If gold breaks above $2,684.08, however, it may attract buyers aiming for resistance at $2,696.64 or higher at $2,709.01. The 50-day EMA at $2,706.93 and the 200-day EMA at $2,715.41 suggest a bearish tilt in the short term.

Traders are closely watching these levels to gauge the next direction, as any sustained move above or below could signal a change in momentum.