Heading into the European session on Friday, the XAU/USD (Gold) maintains a downward trend and is currently trading just below the $3,300 mark. This decline can be attributed to a slight increase in the value of the US Dollar (USD), which typically lessens the demand for gold. Nevertheless, a combination of factors is keeping the price of this precious metal above a one-week low, which was reached on Thursday. This should cause caution among traders who are looking to sell, as there are potential risks that could result in even greater losses.
In addition, a recent court ruling that reinstated US President Donald Trump’s tariffs has added uncertainty to the market, along with ongoing geopolitical tensions. These factors have affected investor sentiment and have been a positive influence for the safe-haven Gold price. Furthermore, the belief that the Federal Reserve (Fed) will continue lowering interest rates in 2025 is keeping the USD in check and providing support for gold, especially with the upcoming release of the US inflation report.
On a technical level, the Gold price failed to surpass the $3,325-3,326 resistance level and has since declined, dropping below the $3,300 mark. Indicators on the 4-hour chart are also showing negative movement, indicating a potential continuing decline for the Gold price in the short term. As a result, we may see further weakening towards the $3,280 support level, before reaching the overnight low around $3,246-3,245. If this support level is broken, it could lead to even greater losses, with the $3,200 mark being the next significant barrier.
On the other hand, the $3,325-3,326 area remains a key resistance level, followed by a supply zone at $3,345-3,350. If the Gold price manages to surpass these levels, it could reverse the negative trend and result in short-covering, leading to a rise towards the $3,400 mark. Momentum could further increase towards an additional resistance level near $3,432-3,434.