Gold prices are showing signs of softening as the demand for safe-haven assets declines, yet the broader bullish outlook for the precious metal remains intact. Unless we start to see definitive signs of lower highs, lower lows, and substantial trade deals replacing ongoing political rhetoric from the Trump administration, the potential for gold to set new record highs remains alive.
After a streak of record-breaking rallies, gold entered the new trading week on weaker footing, dipping around 1.2% by mid-morning London time. The metal, which recently peaked at an unprecedented $3,500 per ounce, experienced a sharp sell-off, falling to a weekly low of $3,260. It later recovered modestly, stabilizing near $3,319. While volatility was present, overall price action last week remained relatively subdued. Despite losing some of its haven-driven momentum, the broader narrative for gold continues to lean positive as political and economic uncertainties persist.
Underlying Risks Linger Despite Surface Stability
Though market movements late last week and early this week suggest a more composed atmosphere, significant risks continue to brew beneath the surface. Concerns surrounding global trade tensions, recessionary threats, and unpredictable monetary policies still loom large. Much hinges on the outcome of US-China trade negotiations. If talks deteriorate or tariffs escalate, investors could once again flock to gold as a defensive asset, pushing prices higher.
Key Economic Events May Influence Gold’s Path
While trade discussions have been the main driver of sentiment recently, attention is gradually pivoting toward economic indicators and corporate earnings reports this week. Today may be quiet, but the rest of the week promises significant data releases: GDP reports from leading economies, China’s vital April PMI surveys, and earnings announcements from major technology firms known as the “Magnificent 7.” Additional insights will come from US ISM manufacturing numbers and economic updates from Canada and Mexico. Even though the first-quarter US GDP data may already be priced in, upcoming consumer confidence reports and corporate results are expected to offer more current indicators of economic health. Friday’s US nonfarm payrolls report is also on deck and could create notable market reactions. A disappointing jobs report could weaken the US Dollar, providing another tailwind for gold prices.
Gold Technical Analysis: Critical Support and Resistance Levels
The recent retracement from the $3,500 peak underscores the psychological importance of that level. Nevertheless, the broader technical framework remains supportive of a bullish continuation unless the market begins forming lower highs and lower lows.
The immediate focus is on whether buyers will defend key support levels. Gold is currently testing the $3,245–$3,283 range, an area that acted as strong support last week. A successful defense here could pave the way for a new rally. However, if this zone fails, the next support target would be around $3,167, representing the previous breakout level from earlier this month.
For those monitoring deeper corrections, the ascending trendline near $3,100 emerges as a crucial threshold. A break below this level would suggest a more serious shift in sentiment and could undermine the longer-term bullish case. Conversely, holding this line could offer a strong base for another upward push.
On the upside, immediate resistance lies at $3,366, followed by a more substantial barrier around $3,430. Should bullish momentum gain traction once again, an attempt to reclaim and surpass the record high of $3,500 could soon materialize.
