Gold prices consolidate near all-time highs as Fed rate cut bets and trade tensions fuel demand.
- Gold price (XAU/USD) hovers just below the psychological $3,000 mark, holding onto recent gains.
- Rising trade tensions and geopolitical risks keep safe-haven demand intact, bolstering Gold’s bullish outlook.
- Markets anticipate multiple Fed rate cuts in 2025, weighing on the USD and further supporting bullion.
- China’s latest stimulus measures help stabilize risk sentiment, capping Gold’s near-term upside.
Gold prices remain in a tight consolidation phase at the start of the week, trading just beneath record highs reached last Friday. The broader bullish trend stays intact as economic uncertainty, geopolitical risks, and expectations of Fed policy easing continue to support demand for the non-yielding metal.
Traders now expect the Federal Reserve to cut interest rates multiple times this year amid signs of slowing US economic activity, weaker inflation, and a cooling labor market. This puts the US Dollar under pressure, reinforcing Gold’s strength. However, Beijing’s fresh stimulus measures—designed to boost domestic consumption and stabilize markets—have slightly increased risk appetite, preventing further immediate gains for XAU/USD.
Market Movers: Fed rate cut bets and geopolitical risks underpin Gold
US Treasury Secretary Scott Bessent reassured markets on Sunday that recent market corrections are normal. However, concerns over US trade policies, particularly new tariffs proposed by President Trump, continue to weigh on sentiment, driving safe-haven flows into Gold.
Investors are also closely monitoring the Federal Reserve’s upcoming policy meeting, with markets currently pricing in a 75-basis-point rate cut by year-end. The University of Michigan’s latest survey showed a sharp decline in consumer sentiment, reinforcing expectations for Fed easing. Futures markets suggest a 25-bps cut in June, followed by additional reductions in July and October.
China’s latest economic stimulus package—unveiled by the State Council on Sunday—includes measures to boost household income and revive the struggling property sector. While this has temporarily lifted risk sentiment, it also limits the immediate upside for Gold as investors weigh the implications for broader market trends.
Technical Outlook: Gold remains poised for further gains
Last week, Gold’s breakout above the $2,928–2,930 resistance zone signaled a continuation of its multi-month uptrend. While the Relative Strength Index (RSI) remains near overbought territory, prompting caution among traders, the broader technical structure favors further gains.
Immediate support lies near the $2,956 region, followed by the critical $2,930–2,928 zone. A break below these levels could trigger additional downside pressure toward $2,900 and last week’s low of $2,880. However, as long as Gold remains above these key support levels, bulls will likely target further upside, with the following significant resistance seen beyond the $3,000 psychological threshold.
Bitcoin Faces Supply Gap Between $70K and $80K
According to on-chain data from Glassnode, Bitcoin (BTC) is showing signs of a potential sharp decline if prices fall below the $80K threshold. The analysis highlights a “supply gap” in the $70K—$80K range, indicating that limited BTC changed hands in this zone during last year’s rally.
BTC surged from $70K to above $80K following Donald Trump’s election victory in November. Still, with minimal trading activity in this range, the lack of strong support could lead to an accelerated pullback if selling pressure mounts. Approximately 20% of BTC supply is currently at a loss, meaning these holders bought above $83K, adding further downside risk. Short-term holders have already offloaded over 100,000 BTC amid the recent market correction, contributing to Bitcoin’s 30% drop from its all-time high of $108K.
USD Weakens as Trade Tensions Persist
The US Dollar remains under pressure as market participants digest Treasury Secretary Bessent’s remarks and President Trump’s latest tariff threats. Trump’s announcement of “reciprocal and sectoral tariffs” set for April 2 adds another layer of uncertainty to global markets.
Scotiabank’s Chief FX Strategist, Shaun Osborne, noted that despite Friday’s market rebound, continued policy uncertainty subdued risk appetite. Global investors are closely watching the Fed’s next moves, while policymakers in Europe and China are rolling out fresh stimulus measures. With the DXY index breaking below key support levels, the USD’s near-term outlook remains bearish, increasing the likelihood of a test toward the 100–102 range.
As central bank meetings unfold this week, market participants remain cautious. While the Fed, Bank of England, and Bank of Japan are expected to hold rates steady, the Swiss National Bank may opt for a 25-bps cut, and Brazil’s central bank is anticipated to raise its benchmark rate by 100 bps. These policy decisions will play a crucial role in shaping risk sentiment and influencing Gold and FX markets in the days ahead.
With UltraTrader, trade smarter, not harder.
