Gold Surges as Risk-Off Mood Grips Markets Ahead of Key US Data

Gold prices have reignited their upward trajectory, climbing 0.55% to $3,338 as risk-off sentiment sweeps financial markets. With the US Dollar and Treasury yields retreating, investors are flocking to the safe-haven metal amid trade war concerns and anticipation of pivotal US economic data. Here’s why gold is poised to test $3,400 and what to expect in the week ahead.

Risk-Off Sentiment Boosts Gold’s Appeal

A souring market mood has propelled gold’s resurgence. Trade war fears, amplified by conflicting signals from US President Donald Trump and Beijing’s denial of ongoing talks, have eroded risk appetite. Wall Street’s early gains fizzled, and investors shunned the US Dollar, driving the US Dollar Index down 0.36% to 99.22. Falling US Treasury yields, with the 10-year note at 4.224% and real yields at 1.954%, reflect growing recession concerns. Expectations of 91 basis points of Federal Reserve rate cuts, as per Prime Market Terminal data, further underscore market unease, cementing gold’s safe-haven status.

Crucial US Data to Shape Gold’s Path

This week’s US economic releases will be critical for gold’s trajectory. Traders are eyeing first-quarter GDP figures, the Core Personal Consumption Expenditures Price Index, and Nonfarm Payrolls, all due later in the week. Tuesday’s JOLTS report, expected to show job vacancies dipping to 7.5 million, and Consumer Confidence data, projected to weaken to 87, will set the tone. Strong data could temper expectations of aggressive Fed easing, potentially capping gold’s upside. Conversely, weaker-than-expected figures may amplify recession fears, pushing XAU/USD toward $3,400.

Technical Outlook: Bullish Momentum Builds

Gold’s technical setup signals robust bullish potential. The daily chart confirms an intact uptrend, with buyers defending the $3,300 level despite failing to breach prior highs. Technical indicators remain in positive territory, suggesting momentum is building. A break above $3,350 could pave the way for a test of $3,400, while a drop below $3,300 might see prices slide toward $3,200. For now, the balance tilts toward buyers, supported by market dynamics and safe-haven demand.

Gold’s rally is fueled by a confluence of trade tensions, softening US yields, and looming economic uncertainty. This week’s data will either reinforce or challenge the current risk-off narrative. If recession signals intensify, gold could surge past $3,400. However, unexpectedly resilient US data might bolster the Dollar, capping gains. Traders should monitor Tuesday’s releases closely and watch for a decisive move above $3,350 to confirm the next leg higher.