Uncertainty around tax and trade policies weighed on business investment. Meanwhile, the 10-year Treasury yield dropped six basis points to 4.446%, and real yields declined to 2.116%, slightly cushioning gold’s losses. Still, the combination of rising consumer sentiment and a stronger dollar had a greater influence in pushing gold lower.
Despite the correction, gold’s long-term outlook remains bullish. Moody’s downgrade of US debt from AAA to AA1 highlights growing fiscal risks. Additionally, traders are pricing in 46.5 basis points of Fed easing by year-end.
China sharply increased its gold imports via Hong Kong in April, marking the highest monthly inflow since March 2024. These factors suggest that while gold faces short-term pressure, structural support remains strong due to fiscal concerns and rising physical demand.
Gold (XAU) Technical Analysis
Gold Daily Chart – Descending Channel
The daily chart for gold shows that the price has reached the resistance of the descending channel and is correcting lower. This pullback highlights the significance of the resistance near $3,360. A break above $3,370 could trigger another move toward $3,500.
