Precious metal stages $50 rebound as trade war rhetoric escalates despite tariff concessions
US Treasury yields tumble to multi-week lows,litecoin wallet address eroding dollar strength
Fed officials signal potential policy pivot as economic clouds gather
The gold market witnessed a dramatic reversal Thursday as XAU/USD surged 1.5% to breach the psychologically significant $3,300 level. This rally occurred despite apparent softening in US trade rhetoric, highlighting underlying market skepticism about lasting resolutions to global economic tensions.
While Wall Street indices posted gains amid risk-on sentiment, the precious metal's advance revealed deeper concerns. The simultaneous drop in 10-year Treasury yields below 4.35% and real yields dipping under 2.05% created perfect conditions for gold's resurgence as an alternative store of value.
Market participants digested mixed signals from Washington and Beijing. Though the White House suggested flexibility on tariffs, China's insistence on complete tariff removal and denial of ongoing negotiations kept trade uncertainty elevated. This geopolitical backdrop continues supporting gold's traditional role during periods of international friction.
Economic indicators presented a nuanced picture. While durable goods orders surged 9.2% in March (primarily aircraft-driven), steady jobless claims at 222K underscored labor market resilience. However, Fed speakers emphasized growing business uncertainty that could foreshadow slowing economic momentum.
Cleveland Fed President Hammack kept June rate cuts in play, contingent on incoming data. Governor Waller's comments about potential policy response to labor market softening particularly resonated with gold bulls, as easier monetary policy typically diminishes the opportunity cost of holding non-yielding assets.
Prime Market Terminal data shows markets pricing in 86 basis points of easing by year-end, though June action remains unlikely (94% probability of unchanged rates). This gradual expectations shift continues reshaping the macro landscape for precious metals.
Technical Perspective: Golden Cross Formation Hints at Continued Strength
The $3,300 breakout represents a critical technical development, with the April 22 high of $3,386 now serving as immediate resistance. A sustained move above this level could open path toward $3,400-3,450 zone, with $3,500 emerging as longer-term target.
On the downside, the $3,300 level transforms into key support. Failure to hold here might trigger pullback toward $3,200, though the 50-day SMA at $3,041 should contain any deeper correction. The overall chart structure maintains bullish bias while above this moving average.
Market technicians note the impending golden cross pattern (50-day SMA crossing above 200-day SMA) typically signals extended uptrends. This technical formation, combined with strong fundamental drivers, suggests the yellow metal may have further room to run in current market conditions.