Gold prices drop as Wednesday’s Asian session begins, which is sponsored by Trump’s comments that he is not looking to fire Fed Chair Jerome Powell. At the time of writing, Yellow Metal plunges over 1% and trades at $3,291.
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Interest Rates
Recently, US President Donald Trump said that he had no intention of firing Powell. He said, “The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.”
Bullion prices
Earlier news from the United States (US) Treasury Secretary Scott Bessent revealed that he saw a de-escalation with China, which improved the market mood, which is a headwind for Bullion prices. Since the headlines, the yellow metal drifted lower by $129 from around $3,420 to $3,291.
Despite this, uncertainty about US trade policies and President Donald Trump’s attacks on the Federal Reserve (Fed) can boost demand for Gold and push prices higher. So far in the year, Gold prices have remained up almost 29% due to geopolitics and Trump’s swinging mood.
Last week, Chair Jerome Powell said the Fed would remain data-dependent and even flagged the chance of a stagflationary scenario, acknowledging, “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension.”
Amid this backdrop and an uncertain economic outlook, investors flock to safety, as the flows of Gold ETFs are picking up, according to the World Gold Council (WGC).
“Global physically backed gold ETFs1 reported strong inflows in March totaling US$8.6bn. This helped drive total Q1 flows of US$21bn (226t) to the second highest quarterly level in dollar terms, only behind Q2 2020’s US$24bn (433t),” revealed the WGC.
Gold Price Technical Outlook
Gold’s rally remains intact, yet the drop below $3,300 was short-lived as the precious metal has bounced back somewhat. If buyers want to retest $3,500, they will have to surpass $3,407 once again before testing the all-time high. Nevertheless, the Relative Strength Index (RSI) is overbought, and failure to reach 80 could pave the way for a pullback of bullion.
On the downside, a daily close of Gold (XAU/USD) below $3,300 could push gold prices to $3,240 and then $3,180.
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