- Gold price dips on Friday and looks set to close off this week at a loss.
- China says no trade talks are underway with the US, refuting Trump’s claims of ongoing negotiations.
- Traders appear to be buying into the rumours of a deal, pushing stocks higher and reducing their exposure to Gold.
Gold price (XAU/USD) is seeing more profit taking this Friday, and looks set to close off this week in the red around $3,300 at the time of writing. The move down comes amid increasing confusion on what is the status of the trade conflict between the United States (US) and China, with US President Donald Trump giving the impression that talks are taking place and China denying it.
In early trading on Friday, Bloomberg released a headline that mentioned China is weighing exempting some US goods from tariffs as costs are rising out of control, throwing markets left and right. At the same time, Bloomberg also reported that the country is preparing emergency plans to deal with external shocks with new finance and policy tools.
Daily digest market movers: Trump comments
- As this Friday further develops, US President Trump said in European trading hours that already 200 trade deals have been made and that Chinese President Xi Jinping has been calling with Trump.
- After reports from the Swiss National Bank (SNB) booked a 6.7 billion Swiss Francs (CHF) profit on the back of its Gold holdings in the first quarter of 2025, the central bank of Kenya says it is considering adding Gold to its reserves to diversify its foreign-exchange holdings beyond the dollar and other currencies, Bloomberg reports.
- The record-setting rally in Gold and its large intraday moves made waves in China by stoking retail demand, fanning unprecedented trading volumes on the Shanghai exchange and drawing warnings from the authorities, Reuters reports.
- US Treasury Secretary Scott Bessent said the US and South Korea could reach an “agreement of understanding” on trade as soon as next week, Bloomberg reports. More and more headlines on possible trade deal agreements should put downward pressure on Gold.
Gold Price Technical Analysis: Only one side of the story
The overheated Gold rally looks to be in need of some further cooling. Traders look to be buying into the rumors that a trade deal between the US and China could come very soon, despite China coming out contradicting those rumors. The risk here could be that markets are misinterpreting the US semantic on whether they are “talking” or “negotiating”, and that no deal is done anytime soon with possibly a revisit to $3,500
Looking at technical levels, the daily Pivot Point at $3,335 is the first upside and intraday level that needs to be reclaimed. The R1 intraday resistance saw a small attempt for a test in very early opening this Friday, coming in around $3,381. Further up, Gold price could extend the rally to the R2 resistance at $3,414, surpassing the $3,400 handle.
On the downside, the S1 support this morning briefly broke, though sees price action now reversing back above it, at $3,302. Further down, the S2 support at $3,256 precedes the technical pivotal floor near $3,245 (April 11 high).
XAU/USD: Daily Chart
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
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