Gold (XAU/USD) prices slipped slightly on Tuesday, retreating from the previous day’s gains to hover around $3,226 as traders search for clear direction. The metal’s earlier rally was tempered by comments from Federal Reserve officials responding to the recent US credit rating downgrade by Moody’s.
Atlanta Fed President Raphael Bostic noted the downgrade could have a ripple effect on the economy and cautioned that it may take three to six months for uncertainty to settle, according to Bloomberg.
On the geopolitical front, the image of the US took a hit following President Donald Trump’s remarks on his phone call with Russian President Vladimir Putin regarding the Ukraine conflict. Trump indicated that negotiations would begin immediately but warned that if talks break down, the US might withdraw from further efforts. “Some big egos involved,” Trump said, adding, “This is not my war,” Reuters reported. This marks a shift from his campaign promise to end the war in his first 100 days, signaling a possible pullback from diplomatic engagement.
Market Movers: Geopolitics, Trade Talks, and the US Dollar Drive Gold
Gold’s decline reflects fading haven demand following the Moody’s downgrade, with investor focus shifting toward easing trade tensions between the US and China. Meanwhile, the Trump administration granted a crucial permit for a gold mining project in Idaho. The permit, issued by the US Army Corps of Engineers under the Clean Water Act, facilitates the Stibnite project by Perpetua Resources Corp., which also holds reserves of antimony, a mineral critical for munitions. This move was overseen by Interior Secretary Doug Burgum, chair of the National Energy Dominance Council, Bloomberg reports.
US Treasuries steadied Tuesday after volatile trading on Monday triggered by the US debt downgrade. Equity futures dipped 0.3%, while gold prices fell about 0.5%, weighed down by weak safe-haven demand, according to Bloomberg.
Technical Outlook: Gold Faces Resistance, Sideways Movement Expected
Despite the dent to the US Dollar’s image, high yields are limiting gold’s upside potential as a safe haven. The market is likely to consolidate in a sideways pattern until fresh catalysts emerge.
Resistance at $3,245, the April 1 high, proved difficult to breach on Monday. Should gold break above this level, next resistance points include $3,250 (R1) and $3,271 (R2), though significant market drivers would be needed to push prices that high.
Support stands at the daily S1 level near $3,207, followed by the psychologically important $3,200 mark. A breach below these levels could lead to further declines toward intraday S2 support at $3,185, the April 3 high at $3,167, and the 55-day Simple Moving Average at $3,151.
