Gold (XAUUSD) Price Forecast: Key Support Near $3,151 Under Threat After CPI and Tariff Truce

Gold Pressured Below $3,228 as Trade Truce and Fed Outlook Sap Safe-Haven Demand

Gold prices slipped for a second consecutive session on Wednesday, testing key technical levels as easing U.S.-China trade tensions and cooling inflation data weighed on bullion’s appeal. Traders are closely eyeing the 50% retracement level at $3,228.30, which now acts as the pivot in the short-term structure.

At 12:14 GMT, XAU/USD is trading $3214.56, down $35.62 or -1.10%.

Will the 50-Day Moving Average Near $3,151 Hold the Line?

Technical traders are watching the support zone between $3,228.38 and $3,164.23, with particular focus on the 50-day moving average at $3,151.00. This level is viewed as a critical inflection point. According to trader analysis, if gold breaks through this entire support zone and tests the 50-day moving average directly, a bounce is possible. However, failure to hold above $3,151 would likely trigger another steep selloff, with the 200-day moving average at $2,787.04 as the next major downside target.

U.S.-China Trade Truce Reduces Demand for Safe-Haven Assets

Bullion lost ground following news of a temporary easing in trade tensions between the U.S. and China. Over the weekend, both nations agreed to a 90-day suspension of reciprocal tariffs during talks in Geneva. The White House also announced a reduction in the de minimus threshold for low-value shipments from China. This thaw has sparked a rally in global equities, reducing the urgency for traditional safety plays like gold.

“After the tariff truce announced over the weekend, we’ve seen stock markets surge higher, and at least in the short term, this has removed some of the safe-haven focus that has helped propel gold to record highs in recent months,” said Ole Hansen, head of commodity strategy at Saxo Bank. Hansen warned that breaking below $3,200 could quickly open the door to $3,165.

Fed Rate Cut Expectations Add Mixed Signals for Gold

While easing inflation data has tempered fears of aggressive monetary tightening, traders now expect the Federal Reserve to deliver around 53 basis points of rate cuts beginning in September. Gold typically benefits from lower interest rates, which reduce the opportunity cost of holding non-yielding assets. However, the immediate effect has been overshadowed by improved risk appetite.

Gold Prices Forecast: Bearish Bias Below 50-Day Moving Average Support

With sentiment turning risk-on and price action slipping below key technical levels, the near-term gold prices forecast remains bearish. A break below $3,151 could pave the way toward $2,787, reinforcing the need for traders to monitor incoming inflation data and Federal Reserve commentary closely for direction.

More Information in our Economic Calendar.