Gold (XAU/USD) slips on renewed risk appetite and tariff optimism
Gold price continues to drop as markets shift away from safe havens amidst improved sentiment
Gold (XAU/USD) came under further selling pressure on Thursday, as improving risk sentiment across global markets continued to erode demand for safe-haven assets. The relative strength index (RSI) has now returned closer to its midpoint after briefly entering overbought territory earlier this month. While the broader bullish trend remains intact, any fresh buying momentum may face increasing resistance in the short term.
Gold (XAU/USD) daily chart
Past performance is not a reliable indicator of future results.
The precious metal rallied strongly through early April, driven by investor caution and a flight from equities into safer assets. However, renewed optimism surrounding potential progress in U.S.-China trade talks has lifted market confidence and buoyed the U.S. dollar, both of which have dampened gold’s appeal. Hopes of easing tariffs between the two economic superpowers have shifted capital flows back toward risk assets.
That said, Wednesday’s preliminary U.S. GDP data revealed an unexpected 0.3% contraction in Q1 2025, the first quarterly decline since 2022. The surprise reading triggered a brief equity sell-off as recession fears resurfaced, though markets recovered by session close. The data also reinforced expectations for potential Federal Reserve rate cuts later this year. Despite this, consensus still points to the Fed holding rates steady at next week’s policy meeting, a factor that has lent continued support to the dollar.
On the geopolitical front, tensions between Russia and Ukraine have escalated significantly. Russia has launched a large-scale spring offensive, deploying over 67,000 troops across several fronts. Although Moscow proposed a temporary ceasefire for upcoming Victory Day celebrations, Ukraine has rejected the offer, favouring a more comprehensive peace initiative. Meanwhile, a new strategic minerals agreement between Ukraine and the U.S. highlights strengthening bilateral ties aimed at post-war recovery and economic resilience.