Gold investors: The Institute for Supply Management (ISM) Manufacturing PMI and JOLTS Job Openings data will be featured in the US economic calendar on Tuesday. Investors are likely to ignore these releases and refrain from taking large positions before the Trump administration shares the details about reciprocal tariffs on Wednesday.
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It will be a difficult task for market participants to assess all decisions related to tariffs and determine their short-term and long-term potential impacts. Other nations could also react by announcing retaliatory tariffs, further complicating the matter. Hence, investors could stay on the sidelines and wait until the dust settles. Following the initial volatile action, the performance of Wall Street’s main indexes could provide useful insights into the risk mood. Gold could stage a deep correction if markets turn risk-positive. On the other hand, the precious metal is likely to preserve its strength in case investors grow increasingly concerned about a deepening trade war and seek refuge.
On Friday, the US Bureau of Labor Statistics will publish employment data for March. In case Nonfarm Payrolls (NFP) rise by 200,000 or more, the immediate market reaction is likely to boost the USD and cause XAU/USD to turn south heading into the weekend. On the flip side, a reading at or below 100,000 could have the opposite effect on Gold’s valuation. According to the CME FedWatch Tool, markets are currently pricing in a less-than-15% probability of a 25 basis points Fed interest rate cut in May. A disappointing NFP print, combined with a possible downturn in the US economy due to tariffs, could cause markets to lean toward a rate cut at the upcoming policy meeting and open the door for another leg higher in Gold prices.
Spot Gold technical analysis
The Relative Strength Index (RSI) indicator on the daily chart has risen above 70, pointing to overbought conditions in the near term. On the upside, immediate resistance is located at $3,100 (psychological level) before $3,130 (upper limit of the four-month-old ascending regression channel) and $3,200 (psychological level).
In case Gold stages a technical correction, $3,060 (mid-point of the ascending channel) could be seen as the first support before $3,000-$2,990 (static level, lower limit of the ascending channel) and $2,980 (20-day Simple Moving Average).
