Gold Price Outlook: $3,268 Breakout in Focus Ahead of Fed Rate Decision & ISM Data
- Gold finished the week at about $3,241. This was due to a strong US jobs report and improved trade relations between the US and China.
- The addition of 177,000 jobs in April exceeded expectations, leading to reduced rate cut bets and higher Treasury yields, negatively impacting gold’s attractiveness.
- Market sentiment is shifting towards optimism regarding trade deals, which may keep gold prices capped below $3,500 for the time being.
- Upcoming US macro data, including the Fed’s rate decision and ISM Services PMI, could introduce volatility in gold prices. A key resistance level is $3,268.
Gold ended the week at nearly $3,241, facing downward pressure after a solid US jobs report and signs of easing trade tensions between Washington and Beijing.
Nonfarm payrolls added 177,000 jobs in April, surpassing expectations of 130,000. The data reduced near-term rate-cut bets, increasing Treasury yields and making non-yielding gold less attractive.
Adding to gold’s challenges, China’s Commerce Ministry signaled openness to tariff negotiations. Market strategist Daniel Pavilonis noted that recent optimism around trade deals and a risk-on sentiment return may keep gold capped below $3,500.
Traders are now dialing back their June rate cut expectations, especially after the bond market reacted with a jump in 10-year yields.
XAU/USD technical outlook: Gold price remains bullish but poised to drop below $3,200
The Gold price correction extended below $3,250 after traders tried to reclaim $3,270 but failed. The Relative Strength Index (RSI) shows that sellers are gathering steam; hence, a drop below the $3,200 figure is likely.
In that outcome, the next support would be the April 3 high, which turned support at $3,167. Once surpassed, the next stop would be the 50-day Simple Moving Average (SMA), at $3,080. Conversely, if buyers lift Gold prices above $3,300, it would clear the path to challenge $3,350, followed by $3,400.
US Dollar is down with losses as investors digest labor market figures
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against other currencies, dropped on Friday after briefly exceeding the 100.00 mark. This decline comes despite stronger-than-expected US jobs data. The dollar faces pressure due to cautious views and new trade news related to China.
Weekly digest market movers: Not what was hoped for
The US Bureau of Labor Statistics reported that nonfarm payrolls increased by 177,000 in April, exceeding the expected increase of 130,000 but lower than the revised 185,000 jobs added in March. The unemployment rate stayed at 4.2%, and the labor force participation rate rose slightly to 62.6%, up from 62.5% in March. Average hourly earnings, which measure wage inflation, grew by 3.8% year-over-year, the same as the previous month. Revisions for February and March payrolls cut the total job gain by 58,000, reducing the positive surprise from April’s numbers.
China is open to negotiating tariffs with the Trump administration, which has weakened the US Dollar as traders hope for progress. The US signed a minor deal with Ukraine regarding minerals, but it had a limited economic impact and made no defense promises.
Even though more jobs are being created, experts think April’s labor report might be the last strong one before a downturn in June. The Federal Reserve is expected to lower interest rates in June, with traders predicting cuts of over 100 basis points by the end of the year. Earlier this week, the ADP employment report showed that private sector payrolls grew by only 62,000, the slowest increase since July 2024. The GDP for the first quarter showed a 0.3% annual decline due to rising imports and reduced domestic demand ahead of tariffs.
Technical Analysis
The DXY is flashing an overall bearish signal, trading around 99.53, with a significant decline on the day. The price is moving within a range of 99.40 to 100.33. The Relative Strength Index (RSI) stands at 40.14 and is neutral, while the Moving Average Convergence Divergence (MACD) generates a mild buy signal, suggesting divergence. The Stochastic %K at 59.25 and the Ultimate Oscillator at 42.86 indicate neutral momentum. The 20-day, 100-day, and 200-day Simple Moving Averages (SMAs) at 100.27, 105.45, and 104.42, respectively, along with the 10-day and 30-day Exponential Moving Averages (EMAs) at 99.70 and 101.15, are all producing bearish signals. Support is located at 99.41, while resistance levels are set at 99.70, 99.78, and 100.27.
Bitcoin rallies above $97K following a surge in stablecoin inflows
Bitcoin (BTC) rose above $97,000 on Friday and seems ready to reach $100,000 this weekend. This increase happened because more money flowed into the stablecoin market last week. USDT added $2.5 billion to its market cap, and USDC said $1.2 billion.
Bitcoin rallies as the stablecoin market sees fresh inflows.
The stablecoin market cap rose 2.2% in April to $238 billion, driven by USDT and USDC inflows. USDT’s market cap increased by $2.5 billion in the past week, while USDC grew by $1.2 billion. USDC’s market cap reached a record $62.1 billion, boosting its market share to 26.0%, the highest since February 2023. USDT’s market cap climbed to $148 billion, marking its twentieth consecutive monthly increase and solidifying its market share at 61.9%.
This rise in stablecoin liquidity suggests strong capital inflow into the crypto market, with historical correlations indicating that higher stablecoin market caps often lead to Bitcoin price gains. Bitcoin surged above $97,000 amid a market recovery. Long-term holders accumulated 254K BTC at an average price of $95K, showcasing firm conviction. Short-term holders have begun to profit, which may lessen selling pressure and signal potential bullish trends.
Red alert: Ethereum price crash to continue as rare pattern forms
The price of Ethereum has been falling sharply compared to Bitcoin, and a rare chart pattern suggests it may drop further.
Ethereum fell to 0.01890, its lowest point since January 2020, and 80% below its peak in 2021.
This drop comes as Ethereum loses market share in critical areas of the crypto industry. Data from DeFi Llama shows that Ethereum’s network processed $56 billion in April, less than Solana’s $72 billion.
Ethereum is also falling behind layer-2 networks, which are designed to improve speed and scalability while still being secure.
At World’s Largest Crypto Event, Loud DJ, Parade Of Lamborghinis, Pornstar
Token2049: People were spotted dressed as giant whales in astronaut suits, a playful nod to crypto culture.
Dubai recently hosted the world’s largest crypto event, attracting over 15,000 participants from more than 160 countries. This event demonstrated why Dubai is becoming a global leader in cryptocurrency.
More than 200 speakers from the blockchain and finance sectors shared their insights on current industry topics. Notable guests included Changpeng Zhao, Eric Trump, Raoul Pal, Paolo Ardoino, and Jeremy Allaire.
The event featured over 500 side activities across the city. Attendees enjoyed experiences like ziplines, rock climbing, and ice bath plunges.
Event highlights
This year’s event included several key moments. During his keynote address, Eric Trump called the traditional financial system “broken” and supported cryptocurrency as a means for global economic change. Arthur Hayes suggested that Bitcoin could reach $1 million by 2028 and encouraged investors to go “all in.”
Apple Pay announced its support for stablecoins through Mesh, which could help with retail adoption. CZ made his first public speech since resigning as Binance CEO, discussing regulations and developments in AI.
The event started early, with a DJ playing music before 9 am. Some attendees dressed as giant whales in astronaut suits, while others wore shiny silver tuxedos or suits adorned with Bitcoin logos and cyborg sunglasses.
A special event called “Money Rain” featured promoters launching crypto-printed banknotes into the air. Later, a dance party occurred in the desert where VIP attendees enjoyed music and Armand de Brignac champagne worth $500 (about Rs 42,500). The event organizers also handed out complimentary champagne.
Attendees could zipline over the resort’s canals, and a camel with a crypto exchange’s logo was available for photo opportunities.
After the event, a parade of Lamborghinis and Ferraris took guests to an afterparty at Bohemia Beach Club on the Palm Jumeirah. Organizers scattered meme coin banknotes and offered one lucky guest a private experience with a Japanese adult film star.
Many cities have aimed to become the center of cryptocurrency. Malta calls itself Blockchain Island, Switzerland is Crypto Valley, and Miami is MiamiCoin. However, Dubai is fulfilling that promise as major crypto companies like Binance have recently opened offices there.
Plans to invest in Dubai are increasing due to low taxes, a dedicated crypto regulator, and wealthy Gulf investors. Dubai’s Emirates NBD Bank launched crypto trading services, and DMCC announced plans for a new crypto tower by 2027.
Conclusion
The global economy is changing, with gold prices, cryptocurrency trends, and the financial system in focus. The gold market is preparing for potential changes as investors await the Federal Reserve’s interest rate decision and key economic data. Bitcoin is rising due to increased stablecoin liquidity, while Ethereum faces challenges. Dubai is becoming a significant crypto hub, attracting global interest. Traditional indicators like the US job market and international trade continue to shape investor behavior, highlighting the economic challenges and opportunities.
