The precious metals complex faced selling pressure Tuesday as risk-off sentiment gripped global markets. Gold (XAU/USD) retreated from Monday's record high of $2,956, currently trading near $2,940 amid growing geopolitical uncertainties.
Market participants are digesting reports that the US administration plans to escalate semiconductor export controls targeting China's technology sector. This development comes alongside renewed concerns about global growth prospects and shifting expectations for Federal Reserve policy.
The daily chart shows gold struggling to maintain momentum above the $2,943 pivot point. Early Asian session buying attempts failed to gain traction, suggesting potential near-term weakness.
Immediate support resides at $2,930 (Monday's US session low), with additional floors at $2,908 and the psychologically important $2,900 level. Resistance remains at the record high of $2,956, followed by $2,964 and $2,977.
Several Federal Reserve officials are scheduled to deliver remarks Tuesday, potentially offering clues about the central bank's policy trajectory. Market participants will scrutinize comments regarding:
The CME FedWatch Tool currently prices in a 50% probability of a June rate cut, reflecting shifting market expectations amid evolving economic conditions.
Friday's Personal Consumption Expenditures (PCE) data release looms large as the next major catalyst for gold markets. As the Fed's preferred inflation gauge, the report could significantly influence monetary policy expectations.
Meanwhile, the semiconductor restrictions debate highlights ongoing geopolitical tensions that continue to support gold's role as a portfolio diversifier. Market participants should monitor developments in:
The precious metal's ability to hold above key support levels will likely determine its near-term trajectory as these fundamental and technical factors interact.