Gold News: U.S.-China Trade Risk Supports Gold, but $3392.31 Caps Breakout

Gold Prices Struggle Despite Trade Tensions and Safe-Haven Flows

Gold remains under pressure for a second consecutive session on Wednesday, with prices hovering around $3346 as traders hesitate between chasing strength above this week’s high at $3392.31 or waiting for a dip into key support zones. Market participants are eyeing levels at $3310.48 and $3277.91, with the 50-day moving average at $3248.60 acting as a crucial line in the sand.

At 11:18 GMT, XAU/USD is trading $3351.17, down $2.215 or -0.07%.

Dollar Direction Unclear as Trade Uncertainty Deepens

Despite renewed U.S.-China trade tensions, the U.S. dollar remains broadly directionless, limiting gold’s upside potential. Earlier in the week, safe-haven flows lifted the metal, but current market indecision is keeping gold range-bound. Traders are weighing U.S. President Donald Trump’s escalation of trade rhetoric, including claims that Chinese President Xi Jinping is “extremely hard to make a deal with,” and fresh accusations that Beijing is violating trade agreements.

The White House raised tariffs on steel imports from 25% to 50% on Wednesday, further complicating the trade picture and adding to inflationary pressures. Both sides have accused each other of breaking the terms of the May 12 tariff pause. However, the absence of any concrete progress is driving broader market unease, particularly among commodities traders who rely on geopolitical clarity for directional bets.

All Eyes on U.S. Jobs Data and Fed Rate Path

Markets are now firmly focused on upcoming U.S. labor data, especially Friday’s nonfarm payrolls. A strong print could weigh on gold by reducing the likelihood of near-term rate cuts. “If the data is stronger than expected, interest rate cut expectations are likely to wane, which would weigh on the gold price,” said Commerzbank’s Carsten Fritsch.

Yields on U.S. Treasurys were little changed Wednesday, with the 10-year holding at 4.456% and the 2-year at 3.964%, reflecting a wait-and-see stance. The Federal Reserve’s Beige Book release later today may offer further clues on the central bank’s thinking, especially as Fed officials continue to flag trade risks in their cautious commentary.

Gold Prices Forecast: Breakout or Pullback?

Gold faces a technical crossroads. A breakout above $3392.31 could open the door to retesting the May 6 high at $3435.06, and potentially the all-time high near $3500.20. However, a stronger-than-expected payrolls report would likely bolster the dollar and Treasury yields, undercutting gold.

For now, traders remain split—watching for either a breakout above resistance or a retracement toward the 50-day MA. With geopolitical risks still elevated and the Fed on pause, the metal remains supported but vulnerable. Near-term gold price projections lean neutral to bullish, contingent on labor data and dollar movement.

More Information in our Economic Calendar.