Gold price forecast: Why did gold fall below $3,300 and what Trump's new China tariffs and upcoming US jobs data mean for gold's next big move
Gold price (XAU/USD) held near its session low on Wednesday, struggling to attract buyers as easing US-China trade tensions and stronger dollar demand weighed on the yellow metal. At the time of writing, gold was trading around $3,315, having dipped over 1% earlier in the European session. The precious metal is under pressure for a second straight day, driven by reduced safe-haven demand and firming expectations around key US economic reports.
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Why is gold falling even as inflation worries linger?
The drop in gold price comes at a time when market risk sentiment is improving. One of the biggest drivers of this shift is the easing of trade tensions between the US and several major trading partners. On Tuesday, President Donald Trump signed an executive order aimed at easing tariffs on foreign auto parts, granting carmakers a two-year window to raise domestic sourcing. This move, coupled with US Treasury Secretary Scott Bessent noting 'very good' offers from trade partners, has sparked optimism that major trade conflicts could be cooling down.
That optimism has weakened demand for traditional safe-haven assets like gold. According to LKP Securities' Jateen Trivedi, expectations of a US-China trade deal and a possible peace framework between Russia and Ukraine have also played a role in dragging down gold prices.
Meanwhile, the US Dollar (USD) has strengthened for the second consecutive day. The DXY Index, which measures the USD against a basket of major currencies, gained ground, especially against the Japanese Yen, rising 0.31%. This stronger dollar environment puts additional pressure on gold, which is priced in dollars and becomes more expensive for holders of other currencies.
What's keeping gold above $3,260 despite the sell-off?
While gold is struggling to stay above the $3,300 mark, strong technical support remains. The $3,265–$3,260 zone represents a key support area based on the 38.2% Fibonacci retracement of the recent rally from the mid-$2,900s. If the price breaks below this support, we could see a steeper drop towards $3,225 and possibly even $3,200, which marks the 50% retracement level.
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On the upside, bulls face resistance at $3,328, which aligns with the Asian session high. Above that, the next levels to watch are $3,348–$3,353, followed by a tougher supply zone near $3,366–$3,368. A move past these zones could bring gold back to $3,400, with more room to rise if momentum builds.
Which US data could move gold prices this week?
The next big test for gold comes with a series of high-impact US economic reports. Markets are closely watching:
ADP private-sector employment data
Q1 Advance GDP
March PCE Price Index
Friday's Nonfarm Payrolls
According to economists, the US economy likely grew at an annualized pace of just 0.4% in Q1 2025, far slower than the 2.4% seen in the previous quarter. Meanwhile, the monthly Core PCE—the Fed's preferred inflation gauge—is expected to drop to 0.1% from 0.4%, while the headline figure is forecasted to fall to 0%, down from 0.3%.
Disappointing figures could renew expectations that the Federal Reserve will soon resume cutting interest rates. Already, weaker data from the JOLTS report (job openings fell to 7.19 million from 7.48 million) and the sharp drop in Consumer Confidence to 86.0 in April — a five-year low — have fueled dovish Fed bets. If upcoming data misses forecasts, the USD may retreat, and gold could find fresh support.
What could move gold prices next? Key US events to watch this week
Wednesday
:
ADP Employment Change
(private sector jobs)
Q1 GDP (preliminary)
– Forecast:
+0.4%
(down from Q4 2024's
+2.4%
)
PCE Inflation Data
– Expected Core PCE:
0.1%
(vs 0.4% prior); Headline:
0.0%
(vs 0.3%)
Friday
:
US Nonfarm Payrolls (April)
– Forecast:
+130,000 jobs
, Unemployment Rate:
4.2%
What do investors need to watch next in the gold market?
With gold hovering between critical technical levels and the market flush with key data, volatility could spike soon. The Daily Pivot Point at $3,322 is the first level bulls need to reclaim. For a breakout to the upside, gold must push through $3,344 and then $3,370, a level currently acting as a ceiling.
On the downside, $3,295 is the next cushion. A drop below $3,245—the high from April 11—could signal further weakness. While safe-haven demand is cooling for now, the gold market remains highly sensitive to geopolitical shifts and Trump's unpredictable trade policies.
Gold-backed ETFs saw inflows of 227 tons in Q1 2025, the highest since 2022, according to the World Gold Council, helping the metal reach record highs earlier this month. But Indian jewelry demand is slowing, with Bloomberg forecasting an 11% drop in the fiscal year ending March 2026, which could weigh on physical demand moving forward.
With uncertainty still looming, especially around Fed policy and global trade, gold's path will likely be shaped by data and political headlines in the days ahead.
FAQs:
Q: Why is the gold price below $3,300 right now?
Gold fell due to stronger dollar, trade optimism, and easing safe-haven demand.
Q: What can move XAU/USD prices this week?
US GDP, PCE data, and Trump's tariff order can shake gold's direction.
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