Gold prices (XAU/USD) remained steady in a narrow range on Thursday, showing no clear intraday direction during the early European session. Despite the lack of momentum, the precious metal held close to Tuesday’s multi-week high and appeared poised for further gains, buoyed by a mix of geopolitical tensions, trade uncertainties, and dovish Federal Reserve expectations.
Investor sentiment continues to be shaped by rising global tensions and anticipation over a potential high-stakes discussion between U.S. President Donald Trump and Chinese President Xi Jinping. These developments have kept demand for the safe-haven asset elevated.
Dovish Fed Signals Support Gold
Wednesday’s weaker-than-expected U.S. economic data strengthened the market consensus that the Federal Reserve may lower interest rates further in 2025. Private payroll data from Automatic Data Processing (ADP) showed that U.S. employers added just 37,000 jobs in May, well below expectations and the lowest figure since March 2023. April’s total was also revised downward to 60,000.
In a separate report, the Institute for Supply Management (ISM) revealed that U.S. services sector activity contracted in May for the first time in nearly a year. The ISM Services PMI dropped to 49.9 from April’s 51.6 reading.
These data points triggered a decline in both two-year and 10-year U.S. Treasury yields, reinforcing expectations for a September rate cut. Market participants are also closely watching the growing fiscal deficit, which could worsen if Trump’s proposed tax and spending measures are enacted. These factors have pressured the U.S. Dollar and helped support gold prices.
Geopolitical Risks Keep Risk Premium Intact
Further fueling demand for gold are multiple geopolitical flashpoints. On Wednesday, the U.S. raised steel and aluminum tariffs from 25% to 50%, a move expected to escalate trade tensions with China. Meanwhile, Trump reiterated that Russian President Vladimir Putin vowed retaliation for Ukrainian attacks, while dismissing the prospects for a ceasefire in Ukraine.
Additionally, the U.S. vetoed a United Nations Security Council resolution calling for a ceasefire in Gaza for the fifth time. Israeli airstrikes in the region reportedly killed nearly 100 Palestinians within 24 hours, adding to the global uncertainty.
These developments maintain a strong geopolitical risk premium, enhancing gold’s appeal as a non-yielding, safe-haven asset.
Traders Await US Jobs Data, FOMC Speeches
Despite the positive backdrop, traders are showing caution ahead of Friday’s Nonfarm Payrolls (NFP) report, a key data point that could influence the Federal Reserve’s rate path. Until then, attention will turn to Thursday’s U.S. Weekly Initial Jobless Claims and scheduled speeches from Federal Open Market Committee (FOMC) members, which could provide further market guidance.
Technical Outlook: Bulls Watching $3,385 Level
From a technical perspective, gold’s recent breakout above the $3,324–$3,326 resistance zone is seen as a bullish signal. Momentum indicators on both the daily and hourly charts remain in positive territory, suggesting the path of least resistance is to the upside.
However, bulls are expected to wait for a confirmed break above the $3,385 level — the multi-week high reached on Tuesday — to gain further confidence. A sustained move above this threshold could push prices toward $3,400, then to $3,433–$3,435, and potentially as high as $3,500, approaching the all-time peak from April.
On the downside, initial support lies around $3,355. A deeper pullback may attract fresh buyers near the $3,324–$3,326 breakout zone. Only a decisive break below $3,300 would expose the next support at $3,286–$3,285.
