USD/JPY Jumps After BoJ Holds Rates, Trims Growth Outlook

Economic

Summary:

The Japanese Yen weakened sharply after the Bank of Japan kept rates unchanged and signaled no rush to tighten further, pushing USD/JPY to near three-week highs

BUY USDJPY

Close Time

CLOSED

143.999

Entry Price

149.000

142.000

155.814 +0.255 +0.16%

72.4

Pips

Profit

142.000

144.723

Exit Price

143.999

Entry Price

149.000

The Japanese Yen weakened broadly on Thursday, sending the USD/JPY pair soaring nearly 0.8% to touch a fresh three-week high around 144.80 during the European session. The move came in response to the Bank of Japan’s (BoJ) latest policy decision, which left interest rates unchanged at 0.5% and struck a notably dovish tone regarding the pace of future rate hikes. As the BoJ doubled down on its cautious stance, the Yen fell out of favor, allowing the U.S. Dollar to capitalize on policy divergence despite softening ahead of key American manufacturing data.

At the heart of the Yen’s slump is the BoJ's continued reluctance to tighten monetary policy aggressively—an approach that increasingly isolates it from global peers, particularly the U.S. Federal Reserve. While the Fed continues to signal higher-for-longer rates amid sticky inflation, the BoJ appears more concerned about preserving economic stability than curbing inflation swiftly.

In a widely anticipated move, the BoJ opted to maintain its short-term policy interest rate at 0.5% during its April meeting. However, what rattled markets more was the central bank’s downward revision of its GDP growth forecast for the fiscal year ending March 2026—from a previous 1.1% to just 0.5%. The downgrade reflects heightened concern about economic headwinds, including the lingering impact of global trade tensions and a weakening domestic growth trajectory.

“We will enter a period in which both inflation and wage growth will likely slow somewhat,” BoJ Governor Kazuo Ueda said in a post-meeting press conference, as reported by Reuters. “But we expect a positive cycle of rising wages and inflation to continue due to a severe labour shortage.” Ueda’s comments underscore the central bank’s preference for a wait-and-see approach, relying on structural labor tightness rather than policy levers to stimulate inflation.

Notably, the BoJ also cited potential risks from additional U.S. tariffs, referring to measures introduced by President Donald Trump on April 2 that could weigh on Japan’s trade sector. The central bank’s tone suggests that it is increasingly wary of geopolitical and external shocks, further reducing the likelihood of imminent rate hikes.

The policy divergence between Tokyo and Washington continues to be the primary narrative driving USD/JPY higher. While the BoJ is scaling back its growth projections and emphasizing patience, the Federal Reserve is grappling with inflation that remains above its 2% target. Although the U.S. Dollar gave up some of its earlier gains ahead of the final S&P Global Manufacturing PMI data due later today, the broader trend remains supportive of further USD/JPY upside.

The greenback’s slight retreat appears to be a case of market consolidation rather than a reversal, as traders brace for fresh macroeconomic clues from the U.S. The April manufacturing PMI data will offer insight into whether America’s industrial activity is regaining momentum or slipping under the weight of high borrowing costs. Stronger-than-expected data could reinvigorate expectations for another Fed rate hike or delay in the timing of potential cuts, reinforcing USD strength.

Technical Analysis

From a technical perspective, the USD/JPY pair remains firmly within a bullish corrective trend. Price action continues to hover above the 50-period Exponential Moving Average (EMA50), a sign of sustained upward momentum in the short term. The current rally appears resilient, bolstered by persistent buying interest and the pair's position above a crucial psychological support level at 144.00.

However, a note of caution arises from the Relative Strength Index (RSI), which is flashing early signs of overbought conditions. The RSI has edged into elevated territory, typically associated with potential fatigue in a rally. While this doesn’t necessarily indicate an imminent reversal, it could limit upside potential in the very near term.

Still, as long as the pair remains above the 144.00 threshold, the bullish outlook stays intact. The next key resistance level to watch is around 149.00—a level that, if breached, could pave the way for a return to the multi-decade highs last seen in late 2023.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 144.00

STOP LOSS: 142.00

TAKE PROFIT: 149.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

Price action on the daily chart has confirmed rejection from this area, with a series of bearish candlesticks hinting at a potential reversal.

SELL GBPUSD

Close Time

CLOSED

1.33192

Entry Price

1.28680

1.35200

1.33707 -0.00148 -0.11%

45.3

Pips

Profit

1.28680

1.32739

Exit Price

1.33192

Entry Price

1.35200

Economic data released by the U.S. Department of Commerce on Thursday revealed that the American economy unexpectedly contracted at an annualized rate of 0.3% during the first quarter of 2025. This disappointing result fell short of market expectations for a 0.4% increase and marked a sharp slowdown from the previous quarter’s 2.4% expansion. The weaker growth print arrives at a time of mounting uncertainty surrounding the direction of U.S. trade policy under President Donald Trump.

Speaking on Wednesday, Trump acknowledged that the economic impact of current policies may take time to materialize. He also deflected blame for the stock market's recent performance, pointing fingers at former President Joe Biden. The comments came just days before several high-impact data releases, including the latest U.S. jobless claims, final S&P Global manufacturing PMI, and the ISM Manufacturing Index—all set to be released later Thursday.

However, investor attention remains firmly fixed on Friday’s Nonfarm Payrolls (NFP) report, where consensus forecasts suggest the U.S. economy likely added 130,000 jobs in April. The labor market data could provide further clues about the underlying health of the economy and shape expectations for future monetary policy moves.

Speaking at the “Investing in America” event at the White House, President Trump also took aim at the Federal Reserve, expressing frustration with the current level of interest rates. He hinted at dissatisfaction with at least one Fed official—without naming names—and reiterated his belief that rates should be lower. “I understand interest much better than Powell,” Trump claimed, while also threatening pharmaceutical companies with future tariff barriers if they do not meet certain conditions.

Meanwhile, fresh data from the Bureau of Economic Analysis (BEA) indicated that the Fed’s preferred inflation gauge—the Core Personal Consumption Expenditures (Core PCE) Index—rose by 2.6% year-over-year in March, in line with expectations but down from February’s 3% increase.

Labor market signals were also weaker than expected, as ADP’s National Employment Report showed that private sector employers added only 62,000 jobs in April, significantly below both the forecast of 115,000 and the prior month’s figure of 147,000.

Across the Atlantic, Bank of England (BoE) Governor Andrew Bailey last week highlighted the potential economic risks posed by global trade tensions. Speaking on the sidelines of the International Monetary Fund’s (IMF) Spring Meetings in Washington, Bailey urged policymakers to take the threat to global growth seriously. “We must consider the risk of a trade war very carefully,” he warned.

This week, the UK economic calendar is notably quiet, leaving the British pound more exposed to global sentiment and external developments. The sterling has remained relatively supported against the U.S. dollar amid heightened uncertainty surrounding the ongoing U.S.–China trade conflict. The United States has expressed a desire for China to return to the negotiating table, citing the imbalance in bilateral trade. “It’s really up to China to de-escalate—they sell us five times more than we sell them,” said Bessent in a CNBC Squawk Box interview on Monday. Double Top Formation Signals Potential Bearish Shift in GBPUSD_1

Double Top Formation Signals Potential Bearish Shift in GBPUSD_1

Technical Analysis

The GBP/USD pair has encountered significant resistance near the 1.3431 level, marking a retest of a previous high and forming what now appears to be a textbook double top pattern—a bearish formation. Price action on the daily chart has confirmed rejection from this area, with a series of bearish candlesticks hinting at a potential reversal. The pair has since entered a phase of consolidation, but failure to break above this resistance suggests the next directional move could be downward.

A deeper decline could target the next key support zone around 1.2868. Notably, this level is reinforced by the 100- and 200-period moving averages, currently aligned at 1.27226 and 1.28437, respectively. These moving averages often act as natural magnets for price, reinforcing the likelihood of further downside movement in the near term.

However, should bullish momentum regain control and price breaks decisively above 1.3431, the next upside objective would likely be the psychological resistance at 1.3500—a level that could attract fresh buying interest and potentially signal the continuation of the broader uptrend.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3320

Target price: 1.2868

Stop loss: 1.3520

Validity: May 09, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This area has served as a strong floor in recent sessions, with repeated bullish bounces suggesting buyers may be preparing to reassert control.

BUY EURJPY

Close Time

CLOSED

162.016

Entry Price

163.160

161.500

182.929 +0.318 +0.17%

77.9

Pips

Profit

161.500

162.795

Exit Price

162.016

Entry Price

163.160

Expectations of further monetary easing in the eurozone are gaining traction, as European Central Bank (ECB) officials continue to flag concerns over subdued inflation and rising external risks. On Monday, ECB policymaker and Finnish central bank governor Olli Rehn underscored the threat of inflation remaining anchored below the ECB’s 2% target, particularly amid renewed trade tensions tied to U.S. tariff policies. Rehn stressed the importance of maintaining policy flexibility, even going so far as to suggest that interest rate cuts below the neutral level should not be ruled out in the coming months.

Echoing this sentiment, François Villeroy de Galhau, Governor of the Bank of France and fellow ECB member, reiterated his support for additional rate cuts. He voiced confidence that inflation will gradually return to target, but warned that escalating protectionist trade measures—especially those driven by U.S. policy—pose a serious threat to the eurozone’s fragile recovery and could dampen business confidence and economic growth.

Against this backdrop, markets are now almost fully pricing in a 25-basis-point rate cut at the ECB’s June policy meeting. ECB officials have already flagged expectations of further moderation in both inflation and economic activity, fueled in part by the impact of U.S. tariffs on key European trade partners.

Meanwhile, attention shifts to Japan, where the Bank of Japan (BoJ) is set to announce its monetary policy decision on Thursday following a two-day meeting. Market participants broadly anticipate that the BoJ will leave its benchmark interest rate unchanged at 0.50%—its highest level in 17 years. The central bank last raised rates by 25 basis points in January as inflation approached its 2% target, but it opted to hold steady in March.

In its previous forecast, the BoJ projected GDP growth of 1.1% for fiscal year 2025 and 1.0% for fiscal 2026. However, these forecasts may come under pressure as Japan—an export-driven economy—grapples with ongoing trade tensions. The bank also expected consumer inflation to average 2.4% and 2.0% over the same periods, respectively. Yet with no breakthrough in trade negotiations, the risks of declining exports, weakened capital investment, and rising import-driven inflation are increasing.

Given these uncertainties, BoJ policymakers are expected to keep interest rates on hold until clearer economic signals emerge. In anticipation of possible shocks from U.S. trade actions, Japanese Prime Minister Shigeru Ishiba announced a set of emergency economic measures in mid-April, aimed at cushioning the impact on vulnerable industries and households. Bulls Could Regain Momentum From Local EURJPY Support_1

Bulls Could Regain Momentum From Local EURJPY Support_1

Technical Analysis

The EUR/JPY pair is currently testing a key support zone near 161.96, with local lows recorded at 161.71. This area has served as a strong floor in recent sessions, with repeated bullish bounces suggesting buyers may be preparing to reassert control. Should the pair fail to post a lower low, it may trigger upward pressure, especially if resistance around the descending trendline and the 100-period moving average near 162.46 is breached.

A successful break above this confluence zone could pave the way for a corrective move toward 163.16. However, the Relative Strength Index (RSI) is hovering near 44, still within neutral territory. This indicates that oversold conditions have yet to be reached, and additional downside pressure cannot be fully ruled out. Should bearish momentum resume, the next key support lies at 161.24—a level that may prove pivotal in the near term.

Trading Recommendations

Trading direction: Buy

Entry price: 161.98

Target price: 163.16

Stop loss: 161.50

Validity: May 09, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

According to the World Gold Council, escalating global trade tensions spurred a significant influx of investment into gold ETFs during the first quarter, thereby driving a 19% increase in gold prices within a three-month period.

SELL XAUUSD

Close Time

CLOSED

3302.51

Entry Price

3232.00

3350.00

4299.39 +20.10 +0.47%

705.1

Pips

Profit

3232.00

3231.88

Exit Price

3302.51

Entry Price

3350.00

Fundamentals

The World Gold Council (WGC) reported on Wednesday that global gold demand (including over-the-counter transactions) increased by 1% year-over-year to 1,206 metric tons in the first quarter of 2025, the highest quarterly level since 2016.

A significant rebound in gold ETF inflows drove total investment demand to 552 tons, a 170% increase year-over-year, the highest since Q1 2022. Demand for gold bars and coins remained robust at 325 tons, 15% above the five-year quarterly average. Global gold jewelry demand, a primary component of physical demand, decreased by 21% to 380.3 tons, the lowest level since the onset of the COVID-19 pandemic in 2020.

Central bank purchases, another key driver of gold demand, decreased by 21% to 243.7 tons in the first quarter.

Regarding key consumer markets, the Chinese market witnessed a surge in gold ETF demand, with inflows reaching a record high of approximately RMB 16.7 billion (equivalent to US$2.3 billion, or 23 metric tons) during the first quarter. This unprecedented influx, coupled with soaring gold prices, propelled the total assets under management (AUM) and total holdings of gold ETFs to new historical peaks, reaching RMB 101 billion (approximately US$13.9 billion) and 138 metric tons, respectively.

According to statistical data, the total consumer demand for gold in the Chinese market, encompassing gold bars, coins, and jewelry, amounted to 249 metric tons in Q1, reflecting a 15% year-over-year decrease, primarily due to subdued demand for gold jewelry.

A Fierce Battle for the Monthly Close Begins, with Heightened Volatility Expected_1

Technical Analysis

Gold prices extended their decline for a second consecutive day, retesting the critical US$3,259 level before finding temporary support. Risk sentiment has waned once more, as indications mount that the U.S.-China trade dispute is de-escalating (a bearish signal for gold).

However, the broader outlook remains uncertain, with investors still wary of the lingering negative effects of global tariffs, which continue to fuel safe-haven demand. This dynamic suggests that gold prices may experience significant volatility in the long term.

The bearish catalysts for gold persist, with the 20-day SMA at US$3,259 serving as the primary support level. A breach of this level could see bears targeting the demand zone at US$3,247, with the 5-week SMA at US$3,232 as the subsequent support to monitor.

Given that today marks the end of the month, with a fierce battle for the monthly close underway, a strategy of range-bound trading around key support levels is recommended.

Trading Recommendations

Trading Direction: Sell

Entry Price: 3309

Target Price: 3232

Stop Loss: 3350

Valid Until: May 15, 2025 23:55:00

Support: 3259, 3247, 3232

Resistance: 3314, 3330, 3353

Risk Warnings and Disclaimers

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Eva Chen

Cryptocurrency

Summary:

Reuther's transaction volume remains elevated, signaling substantial investor interest and potentially indicating bullish sentiment, with expectations of near-term rally.

BUY ETH-USDT

Close Time

CLOSED

1774.99

Entry Price

2276.00

1535.00

3085.17 +0.61 +0.02%

5010.1

Pips

Profit

1535.00

2278.89

Exit Price

1774.99

Entry Price

2276.00

Fundamentals

As of April 30, 2025, Ethereum's price stood at approximately US$1,806, with a market capitalization of roughly US$218 billion. The average daily gas fees were around US$0.32, and approximately 34.4 million ETH were staked within the network. Layer-2 scaling solutions held a cumulative value of US$31.12 billion, while monthly developer activity neared 8,000.

Since "The Merge" in 2022, Ethereum's energy consumption has decreased by 99.95%, with ongoing efforts to enhance scalability and performance through upgrades such as EIP-4844 and Pectra.

Ethereum currently maintains a leading position in market capitalization, technological advancement, and ecosystem development. However, it faces challenges related to upgrade timelines, regulatory policies, and competition from emerging blockchain networks. Over the coming months, the community must closely monitor the Pectra upgrade, subsequent sharding progress, and global regulatory developments to ensure the network's sustained evolution and maintain its market leadership.

Technical Analysis

Ethereum's price has sustained above the US$1,800 range since breaching the critical US$1,691 resistance level last Wednesday, with key momentum indicators and technical structures suggesting a potential for further upside.

In the 1D timeframe, Ethereum's price has experienced a significant rally from its recent low of US$1,539, decisively breaking above a key bearish trend line, with resistance at US$1,640. The price has also surpassed the 50% Fibonacci retracement level of the downward swing from the US$2,100 high to the US$1,380 low, indicating that the path of least resistance is upward.

The next significant resistance level is near US$1,930, coinciding with the 76.4% Fibonacci retracement of the aforementioned downward swing. A daily close above US$1,930 could trigger a sustained rally, potentially pushing the price towards US$2,000. The next stop-loss for the bulls could be at US$2,120.

On the downside, Ethereum may find support around US$1,700. The next major support level is at US$1,650, with a break below potentially leading to a decline towards US$1,600. Further declines could see the price testing US$1,550.

Comparing the dynamics of the two major cryptocurrencies, Bitcoin's price has paused its ascent above US$95,000, while Ethereum exhibits stronger momentum relative to Bitcoin. It is recommended to buy the dips.

Recommendations

Trading Direction: Buy

Entry Price: 1778, 1750

Target Price: 2276

Stop Loss: 1535

Valid Until: May 15, 2025 23:55:00

Support: 1743, 1723, 1693

Resistance: 1857, 1953, 2104

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The British Pound retreats from its three-year peak against the US Dollar as investors turn cautious ahead of key US economic releases, including Q1 GDP.

SELL GBPUSD

Close Time

CLOSED

1.33700

Entry Price

1.33200

1.34150

1.33707 -0.00148 -0.11%

6.5

Pips

Profit

1.33200

1.33635

Exit Price

1.33700

Entry Price

1.34150

The British Pound lost momentum against the US Dollar on Wednesday, edging back to 1.3355 during the European trading session after notching a fresh three-year high at 1.3445 just a day earlier. The GBP/USD pair, once fueled by robust UK rate expectations and a softening US macro narrative, now finds itself in the throes of market repositioning, as traders weigh both geopolitical headwinds and monetary policy uncertainty on both sides of the Atlantic.

Much of the intraday pullback is driven by a modest recovery in the US Dollar ahead of a packed North American data calendar, headlined by the preliminary reading of first-quarter Gross Domestic Product. According to the US Bureau of Economic Analysis (BEA), growth is projected to have sharply decelerated to an annualized pace of 0.4%, well below the previous 2.4% print and reflective of early-stage economic softness attributed to trade disruptions and policy volatility out of Washington.

The marked slowdown is not a complete surprise. Earlier this month, President Donald Trump stunned markets with another round of sweeping tariffs targeting major trade partners. The rationale was clear: protect American industry, curb deficits, and leverage negotiation power. However, the broader implications are proving more destabilizing than stimulatory. Businesses have been reluctant to expand capacity or investment amid an atmosphere of “tweet-driven” policy unpredictability, stifling any potential for near-term economic momentum.

At the same time, a string of complementary US data releases including the Q1 Employment Cost Index, ADP employment figures for April, and the Fed’s preferred inflation gauge, the Core PCE Price Index will provide further clarity on the health of the labor market and inflationary dynamics. Expectations point to steady wage growth at 0.9% in Q1, while private-sector job creation is seen dropping to 108,000 in April, down from 155,000 in March. Perhaps most critical is the core PCE figure, which is projected to rise just 2.6% in March, a slowdown from the 2.8% prior reading.

Such data could tip the scales toward a more accommodative Federal Reserve. While markets are near-unanimous in pricing no change for the Fed’s May meeting keeping the target range at 4.25%-4.50% futures now reflect a growing 65% probability of a rate cut in June, according to CME’s FedWatch Tool. That shift reflects a broader reassessment of the Fed’s inflation target trajectory and the economic drag induced by fiscal and trade policy clashes.

Despite this dovish tilt, Fed Chair Jerome Powell remains under persistent political pressure. During an event marking his 100th day in office, President Trump offered yet another thinly veiled critique of the Fed’s rate policy. While avoiding naming Powell directly, Trump’s remarks were unmistakable: “You’re not supposed to criticize the Fed... but I know much more than he does about interest rates, believe me.” Such statements underscore the ongoing tension between White House objectives and the Fed’s independent mandate, a friction that adds to the general climate of uncertainty.

In the UK, the Bank of England faces its own credibility test. The British Pound, though still elevated by recent standards, has come under pressure as traders increasingly price in a potential rate cut by the BoE in its May 8 policy meeting. Market sentiment shifted notably after BoE policymaker Megan Greene warned that the US-led trade war could have net disinflationary effects on the UK economy. Speaking at the Atlantic Council, Greene raised alarms about looming job market stress, exacerbated by an increase in employer contributions to national insurance up to 15% from 13.8% as of this month.

Her comments echoed concerns expressed by BoE Governor Andrew Bailey last week at the International Monetary Fund’s Spring Meetings. Bailey emphasized the risks posed by external trade shocks and signaled a need for policy flexibility, telling reporters, “We do have to take very seriously the risk to growth.” That sentiment has further emboldened market bets on a 25-basis-point BoE rate cut, especially in the absence of meaningful UK economic data this week.

Indeed, with the UK calendar offering little in terms of fundamental support, Sterling is largely at the mercy of external forces. Chief among them is the ongoing US-China trade confrontation. The Trump administration has challenged Beijing to return to the negotiating table, citing China’s disproportionate trade surplus. “I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them,” said top White House advisor Bessent in an interview with CNBC. Beijing, however, remains defiant, vowing to defend its “interests and dignity.”

Technical Analysis

From a structural perspective, GBP/USD has broken decisively below the prior range support near 1.3380, marking a potential bearish shift. The pair had repeatedly failed to sustain above the Point of Control (POC) at 1.3415, a zone of high-volume resistance now acting as a technical ceiling. With price now descending into a low-volume node, momentum could accelerate toward the next key support area at 1.3319.

This setup suggests the market is rejecting the higher value area, breaking into thinner liquidity, and potentially establishing a new bearish leg. A close below 1.3380 acts as confirmation for further downside, with stops ideally positioned above 1.3415 to manage risk. As always, volume and price behavior near the 1.3320 level will offer clues on whether bears can maintain control or if the market will find reason to reverse.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3370

STOP LOSS: 1.3415

TAKE PROFIT: 1.3320

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold (XAU/USD) fell over 1% Tuesday as investors responded to President Trump’s executive order to ease auto tariffs.

SELL XAUUSD

Close Time

CLOSED

3265.00

Entry Price

3200.00

3320.00

4299.39 +20.10 +0.47%

410.3

Pips

Profit

3200.00

3223.97

Exit Price

3265.00

Entry Price

3320.00

Gold prices fell sharply on Tuesday, extending their losses for a second consecutive session as a combination of reduced trade tensions and profit-taking weighed heavily on the safe-haven asset. Spot gold (XAU/USD) declined over 1% in early European trade, slipping toward the $3,275 mark, as the market digested US President Donald Trump's executive order to ease tariffs on car parts—an unexpected gesture that signaled progress in US trade policy and removed one layer of uncertainty from global markets.

The news was first reported by Bloomberg, citing Trump’s intent to support US auto manufacturers while also fostering more amicable trade terms with key global partners. Although short on immediate economic impact, the move rekindled investor optimism that the White House is shifting towards a more cooperative trade stance. For bullion, this spelled downside pressure, as safe-haven flows began to unwind.

The timing of this policy change is crucial. Markets are bracing for a high-impact data release: the preliminary Q1 US Gross Domestic Product (GDP) figures, set to be released at 12:30 GMT. Economists anticipate a modest annualized growth of just 0.4% a dramatic slowdown from the 2.4% expansion recorded in the fourth quarter of 2024. With the Federal Reserve’s May 7 policy meeting looming, any major deviation from these expectations could recalibrate interest rate forecasts and in turn, influence gold's direction.

Alongside GDP, March’s Personal Consumption Expenditures (PCE) inflation data the Fed’s preferred inflation gauge is also due. Core PCE is expected to cool to 0.1% from February’s 0.4%, while headline PCE is forecast to drop to 0%. A lower-than-expected print could validate the Fed's current dovish stance and possibly intensify rate-cut speculation, supporting gold. However, if inflation proves stickier than anticipated, gold could face additional selling pressure as interest rate expectations shift higher.

Adding to the drama, President Trump again lashed out at Fed Chair Jerome Powell, claiming he "knows more about interest rates" than the central banker himself, as reported by Bloomberg. The political friction may increase pressure on the Fed and inject further volatility into an already fragile gold market.

From a broader perspective, gold’s rally earlier this year was largely fueled by global risk aversion. According to the World Gold Council, investors poured 227 metric tons of gold into ETFs in Q1 marking the highest inflow since 2022. That surge, coupled with persistent geopolitical risks, pushed prices to all-time highs.

However, the tide may be turning. Indian gold jewelry demand a key pillar of physical gold consumption declined in March and is expected to drop by up to 11% for the fiscal year ending March 2026, according to Bloomberg. Weak physical demand in Asia, combined with receding investor anxiety, could create the conditions for a deeper correction.

Technical Analysis

On the charts, gold (XAU/USD) is trading within a narrowing descending triangle formation typically a bearish continuation pattern. Price has formed consistent lower highs, bounded by a trendline that continues to push the asset lower. The horizontal support zone between $3,265 and $3,270 is now acting as a critical line in the sand.

A decisive break and close below this region particularly if accompanied by elevated volume could trigger a sell-off toward the next support around $3,245, and potentially as low as $3,200 in extension. On the other hand, if the support holds and upcoming data reignites rate cut bets, a sharp reversal cannot be ruled out.

For now, the RSI has backed away from overbought territory, and the MACD is hinting at bearish crossover momentum. Unless the $3,270 support area holds firm, the path of least resistance appears to be to the downside.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 2265

STOP LOSS: 3320

TAKE PROFIT: 3200

Risk Warnings and Disclaimers

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