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Gold edges higher amid lingering concerns over Moody’s US credit downgrade.
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President Trump signals possible US withdrawal from attempts to mediate Ukraine-Russia conflict.
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Gold holds firm above $3,225, despite tight rangebound trading.
Gold Recovers in European Trading on Lingering Market Uncertainty
Gold (XAU/USD) prices rebounded in European trading on Tuesday, climbing back to around $3,235 at the time of writing. Earlier in the Asian session, gold slipped after several Federal Reserve (Fed) officials reacted to the recent downgrade of the US credit rating by Moody’s.
Federal Reserve Bank of Atlanta President Raphael Bostic stated that the downgrade could have a “ripple effect” on the broader economy and emphasized a waiting period of another 3 to 6 months to assess the impact, Bloomberg reports.
Trump’s Stance on Ukraine Signals Diminished US Leadership
On the geopolitical front, US global influence took another hit following President Donald Trump’s comments on a two-hour phone call with Russian President Vladimir Putin regarding the Ukraine conflict.
Trump stated that negotiations would begin immediately, but if progress stalls, the US would “back away from further involvement.” He cited “big egos involved” and concluded with “This is not my war,” according to Reuters.
This marks a sharp U-turn from his campaign promise to end the war within his first 100 days in office. Trump’s tone suggests he may choose to withdraw the US entirely from the process, signaling an abandonment of diplomatic efforts and likely affecting investor confidence in geopolitical stability.
Daily Digest: Market Caught Between Conflicting Signals
Gold saw pressure as safe-haven demand from the Moody’s downgrade began to fade, while markets focused on the easing of US-China trade tensions, Reuters reports.
Meanwhile, the Trump administration approved a federal permit for a gold and antimony mine by Perpetua Resources Corp. in Idaho. The mine, also rich in critical mineral antimony used in munitions, received the Clean Water Act permit from the US Army Corps of Engineers, facilitated by Interior Secretary Doug Burgum, chair of the National Energy Dominance Council, Bloomberg reports.
US Treasury yields remained steady Tuesday after volatility sparked by Moody’s downgrade. In contrast, equity-index futures dipped 0.3%, and gold slipped 0.5% due to muted demand for safe havens, Bloomberg notes.
Gold Price Technical Analysis: Recovery Holding Firm
The weaker US Dollar (USD) and diminished US geopolitical stature provide a supportive backdrop for gold, a traditional safe-haven asset. However, elevated bond yields continue to pose headwinds, limiting bullish momentum.
Gold is expected to continue trading sideways until a clear catalyst emerges.
On the upside:
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The key resistance at $3,245 (April 1 high) remains a critical level.
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If breached, watch for further resistance at R1: $3,250 and R2: $3,271.
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However, a major catalyst would be required for gold to push beyond these levels.
On the downside:
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Immediate support sits at S1: $3,207, followed by the psychological level of $3,200.
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A break below could trigger a move to S2: $3,185 and April 3 high at $3,167.
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Further downside may be cushioned by the 55-day Simple Moving Average (SMA) at $3,151.
