Gold struggles as US Dollar strengthens, tariffs ease, and inflation data looms

Gold (XAU/USD) trades in wide ranges as traders await fresh US inflation data. A stronger US Dollar, rising yields, and easing trade tensions between the US and China are weighing on gold prices. The market remains sensitive to macroeconomic data and geopolitical developments that may affect the safe-haven appeal of gold.

Gold prices drop as yields rise and US-China tariff deal calms markets

Gold remains under pressure due to multiple fundamental drivers. The US Dollar strengthens as Treasury yields continue to rise, making gold less attractive to yield-seeking investors. Optimism around a temporary US-China trade deal is also reducing safe-haven demand.

The United States has agreed to cut additional tariffs on Chinese goods from 145% to 30%. China responded by reducing its tariffs on US imports from 125% to 10%. These measures are effective for 90 days. This de-escalation of trade tensions reduces market fear and weakens the case for holding gold.

The easing geopolitical risks are pulling investors away from gold. Additionally, upcoming US economic data will play a critical role. The Consumer Price Index (CPI) report for April is due later today. It could offer insight into the Federal Reserve’s future rate path.

Currently, the market anticipates the first rate cut in September. However, if inflation softens, it could bring forward the timeline for monetary easing. Last week, three cuts were expected in 2025. That has now been trimmed to two, possibly starting in September.

Despite of trade deals between the US and China, geopolitical risks still linger. Ukrainian President Volodymyr Zelensky expressed a willingness to meet with Russian President Putin. If talks fail or tensions rise, gold could regain its safe-haven appeal quickly. For now, improved risk sentiment caps the upside.

Key support zones and trend line signals

The gold chart below shows a medium-term uptrend on the 4-hour time-frame. An ascending trend line has guided price action since January. This trend line remains intact and offers dynamic support near the $3,050–$3,080 range.

Recent price action shows a retreat from the $3,400 high, with gold testing minor support near $3,230. A steeper, short-term trend line was broken, confirming a shift in momentum. However, the primary trend line remains a key focus for buyers.

The chart identifies a “Buy Zone” between $2,960 and $3,120. This zone aligns with the longer-term ascending trend line and previous horizontal resistance turned support. If the price dips into this area, buyers may step in aggressively.

A bounce from the buy zone would confirm trend continuation. On the other hand, a breakdown below $2,960 could signal a deeper correction. For now, bulls may wait for a retest of the trend line before initiating fresh longs.

What’s next for Gold amid trade and rate uncertainty

Gold remains under pressure amid a firm US Dollar and elevated Treasury yields. Improving US-China trade relations have also reduced safe-haven demand. A temporary tariff deal between the two nations is contributing to this shift. The US will cut tariffs on Chinese imports to 30% from 145%, while China will lower duties on US goods to 10% from 125% for 90 days. Meanwhile, signs of renewed geopolitical tensions, such as a possible meeting between Zelensky and Putin, could revive gold demand.

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