Heading into the European session on Friday, the price of gold (XAU/USD) remains low and is currently trading just below the $3,300 mark. The drop is due to a slight increase in US dollar (USD) strength, which lessens the demand for the precious metal. However, a combination of factors is keeping the price above the one-week low it reached on Thursday, causing caution for those looking to sell and suggesting that deeper losses may be on the way. A federal appeals court ruling on Thursday put a pause on a previous trade court decision and reinstated US President Donald Trump’s tariffs, creating uncertainty in the market. This, along with ongoing geopolitical tensions, affects investor sentiment and supports the safe-haven nature of gold. Additionally, the belief that the Federal Reserve (Fed) will continue to lower interest rates in 2025 should limit USD strength and provide backing for gold ahead of the crucial US inflation report. On a technical level, the overnight inability to break above $3,325-3,326 resistance and subsequent drop below $3,300 indicates a negative outlook for XAU/USD. The 4-hour chart’s oscillators also suggest a further potential drop for the gold price. As a result, a decline towards the $3,280 support, followed by the overnight low near $3,246-3,245, is likely. A convincing break below this level would open the possibility of even greater losses, with the next significant support at the $3,200 mark. On the other hand, the immediate obstacle is expected at the $3,325-3,326 level, followed by the $3,345-3,350 supply area. If the gold price manages to rise above this resistance, it may turn the negative outlook around and spark a short-covering rally, pushing it towards the $3,400 mark. The momentum could then carry on towards the next significant barrier near $3,432-3,434.