Gold (XAUUSD) Price Forecast: Breakout or Breakdown? $3318.50 Pivot Holds The Key

Economic

Commodity

Summary:

Gold holds above $3318.50 pivot as traders weigh a potential breakout above $3351 or a slide into deeper support. A lower high at $3435.06 signals a possible pattern shift from “buy the dip” to a more cautious “sell the rally” strategy. A close below $3318.50 may open the door to $3228–$3164 zone, with deeper support at the 50-day MA near $3130.40.

Gold Eyes Resistance as Dollar Weakens and Trade Talks Loom

Gold prices moved higher Friday, holding just above the short-term pivot at $3318.50, a level that could determine whether XAU/USD reclaims the $3351.08 threshold or retreats toward deeper support levels. The week has seen choppy trading, with sentiment split between geopolitical risk and profit-taking after last month’s record high at $3,500.20.

At 11:31 GMT, XAU/USD is trading $3325.27, up $19.29 or +0.58%.

Dollar Weakness Gives Gold Temporary Tailwind

Daily US Dollar Index (DXY)

A softer U.S. dollar provided a modest lift to gold, with the Dollar Index (DXY) slipping 0.3% on Friday. While the greenback is still up on the week—thanks in part to optimism around a limited U.S.-UK trade agreement and fading Fed rate cut bets—the short-term dip made gold more appealing to foreign currency holders. Despite the minor pullback, stronger dollar trends have weighed on gold for most of the week, acting as a headwind and capping rallies.

Geopolitics and Trade Tensions Keep Bids Under Gold

Investor focus is shifting to the U.S.-China trade discussions set for the weekend in Switzerland. The possibility of reduced tariffs on Chinese imports has buoyed some optimism, but broader tensions—especially fresh military activity between India and Pakistan—are keeping gold supported as a geopolitical hedge. Central bank demand, tariff concerns, and financial uncertainty remain key undercurrents in the market, although strong rallies are being met with increased profit-taking.

Pattern Shift Hints at “Sell the Rally” Strategy

Daily Gold (XAU/USD)

Technically, the May 1 low at $3201.95 tagged the major retracement zone of $3228.38 to $3164.23, satisfying a typical “buy the dip” setup. However, with a lower top now in place at $3435.06, gold appears to be transitioning into a “sell the rally” mode. If bulls fail to clear $3351.08, price risks sliding back into the retracement zone, with deeper support eyed at the 50-day moving average of $3130.40. This zone could become the next value area for longer-term buyers.

Gold Prices Forecast: Bearish Near-Term, Support Eyed Below $3200

With the market trading below a lower high and failure to decisively reclaim $3351.00, the near-term outlook for gold leans bearish. A close below $3318.50 would expose the $3228.38–$3164.23 retracement zone, with a further test of the 50-day MA at $3130.40 likely if sellers stay in control.

While safe-haven flows and trade risks support the broader bid, the technical setup now favors rallies being sold until a fresh breakout is confirmed. Traders should brace for a deeper pullback before renewed upside is considered.

Source: Kitco

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Glendon

Economic

Forex

U.S. tariffs are not likely to have a "dramatic" effect on Britain's economy and the Bank of England should not neglect longer-term domestic pressures that might push up on inflation, BoE Chief Economist Huw Pill said on Friday.

Pill, who voted against Thursday's quarter-point BoE rate cut, said he understood the BoE's "gradual and careful" approach to future rate cuts as requiring it to be agile and alert to changes in the economy that might require a different approach.

"The analysis in the baseline forecast does not suggest that there's a dramatic shift in the behaviour of the UK economy on the back of these trade announcements and trade uncertainties," Pill said in a presentation to businesses.

On Thursday, the BoE said the impact of tariffs "should not be overstated" and was likely to lead to a 0.3% hit to the size of Britain's economy over three years and reduce inflation by 0.2 percentage points in two years' time.

That was based on U.S. tariffs in effect on April 29, before a deal was announced on Thursday which should see a reduction in high tariffs on U.S. imports of British cars and steel, though a lower 10% tariff on most other goods will stay.

Governor Andrew Bailey said earlier on Friday that this deal was "good news" , relatively speaking, but still left tariffs higher than they had been previously.

Pill said the central bank would not allow the uncertainty over tariffs to distract it from returning inflation - set to rise to 3.5% later this year - back to its 2% target.

"There are other forces - and maybe more long-lasting and underlying forces in the UK economy itself. Fergal (Shortall, BoE director of monetary analysis) emphasised the dynamics in pay and wages, and I think correctly so (which) certainly we should not neglect," he said.

British wages are growing at an annual rate of around 6%, roughly double what most BoE policymakers think is a sustainable pace. On Thursday the BoE forecast private-sector wage growth would slow to 3.75% by the end of the year.

Source: TradingView

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Warren Takunda

China–U.S. Trade War

Economic

There are decades where nothing happens, and then there are weeks where decades happen. The past few weeks have certainly fallen into the latter category, with remarkable intensity.

Since Donald Trump’s Liberation day announcements, stock markets have made a round trip. After an initial collapse we saw one of the strongest and fastest rebounds in recent history.

For the moment, things seem to have calmed down. Still, we are clearly not out of the woods yet. Or to put it in market terms: expect volatility to persist.

This volatility originates from both the geopolitical and economic domains. As Neil Howe so eloquently argues in his book "The Fourth Turning Is Here," a fourth turning is unfortunately a period marked by wars and geopolitical tensions — an era in which extremist parties, both from the left and the right, gain strength, while the centre becomes smaller, weaker and increasingly powerless to make the decisions that, in the end, everyone knows must be made.

It is also a point in history during which sitting presidents, parties, and governments of any colour, shape or ideology are typically voted out.

The second big source of uncertainty and volatility originates from the economic sphere and is closely related to the first one. In a fourth turning, globalisation is under pressure. In our book "The New World Economy in 5 Trends," Koen De Leus and I discuss not deglobalisation but multi-globalisation.

China, a pole of economic and military power

We are no longer looking at a unipolar world solely centred around the US. Say hello to the multipolar world in which China is rapidly becoming a pole of economic and military power. Meanwhile, the old continent is struggling to speak with one voice and remain relevant.

Just to say that the economic volatility that we are witnessing is closely related to the geopolitical fragmentation. Not so long ago, when the world was still truly globalised, we had one global business cycle. All the major blocks tended to move together on the waves of global expansion and global contraction.

In this world, central banks’ action would sometimes differ a bit in an amplitude, but generally the direction would be the same. Today, it is not so hard to envision the US and the European economies to grow at a different pace and central banks as a consequence conduct and all together different policy.

Also, China will, depending on the policies conducted, grow at a different speed. Japan is finally exiting more than four decades of deflation and its interest rates are on the rise, while in most other parts of the world they are coming down.

We should look at this new economic reality in terms of tectonic plates. The blocks are no longer moving at the same speed in the same direction. Instead, the plates are shifting unpredictably at different speeds.

It’s no wonder that we'll see collisions, leading to massive volatility in currency and interest rate markets as a logical consequence.

In this world, volatility will be more the rule than the exception. The main conclusion of our book “The new world economy in 5 trends” is that after the COVID-19 pandemic, we have moved into a new economic paradigm in which both interest rates and inflation will be structurally higher than from 1982 until the pandemic.

It all comes and goes in waves, it always does. And a huge wave is coming. The drivers of this totally new environment are the massive debts, aging of the population, multi-globalisation (including a new arms race) and climate change.

Innovation may play a mitigating role and may in an extreme scenario be even powerful enough to counter the four other forces.

Investors should focus on real assets

All of this has deep and profound consequences for investors. Even though volatility will be huge, holding too much cash is not an option as inflation will eat up its purchasing power.

Above all, investors should focus on real assets like equities, real estate, wine and gold and silver, for which the bull market has only just has begun. The same goes for the commodity space. We are only in the very first inning of the largest commodity bull market in time due to massive supply shortages that we foresee.

For companies, it means that they should put in place hedging techniques for navigating a world of higher interest rates, higher inflation and higher and more volatile commodity prices.

Countries have a unique opportunity to outperform in a fourth turning, at least for those who understand the rules of the new game. Those who don’t will have a hard time keeping the bond vigilantes off their backs.

Maybe in 30 years’ time we will look back on today as both the start of the European Renaissance and the end of US Exceptionalism. This would bode well for both the euro and European equities.

However, it will not be a walk in the park. The road that the old continent will have to travel to be once again a voice on the world stage will be long, hard and winding.

Source: Euronews

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Michelle

Economic

Forex

U.S. President Donald Trump’s tariff agenda is likely to push up inflation, weigh on employment, and dent growth later this year, according to Federal Reserve Governor Michael Barr.

Should prices and unemployment begin to rise, the rate-setting Federal Open Market Committee may be in a more difficult position as it assesses its next policy moves, Barr added in prepared remarks to the Central Bank of Iceland on Friday.

"The size and scope of the recent tariff increases are without modern precedent, we don’t know their final form, and it is too soon to know how they will affect the economy," Barr said.

The statement was the first Barr, who stepped from his prior role as Fed Vice Chair for supervision in February but stayed on as a Fed Governor, has delivered on monetary policy in roughly a year.

However, Barr argued that, given progress in corralling inflation back down to its 2% target level and the overall economy’s "strong starting point", the Fed’s monetary policy is in a "good position to adjust as conditions unfold". In the first quarter, U.S. gross domestic product contracted due largely to the spike in imports, although consumer spending and labor market indicators remained resilient.

Earlier this week, the central bank left interest rates on hold at a range of 4.25% to 4.5%, but flagged that risks to inflation and the job market are increasing. Fed Chair Jerome Powell later suggested that these risks were likely linked to Trump’s sweeping tariffs, adding that it was "not at all clear" what the appropriate response for interest rates should be in response to the tariff uncertainty.

In early April, Trump unveiled punishing levies on dozens of U.S. trading partners, saying the moves were necessary to reshore lost manufacturing jobs and bolster government revenues. However, he later instituted a 90-day pause to the duties on most of these countries, claiming it would give officials more time to negotiate a slew of individual trade agreements.

On Thursday, Trump and U.K. Prime Minister Keir Starmer announced a trade deal between the U.S. and Britain, bolstering hopes that the White House could secure aggrements with other nations. Talks are due to take place in Switzerland this weekend between U.S. and Chinese officials, with Trump suggesting that heightened levies of at least 145% on Beijing will eventually be lowered.

Source: Investing

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Adam

Economic

As Trump administration officials prepare to meet with Chinese officials in Geneva this weekend, it’s tempting to believe the momentum from the United Kingdom trade deal announcement on Thursday will carry over. Don’t hold your breath.

“I’m keeping my expectations in check. Tariffs are high. Tensions are high. It’s easier to impose tariffs than to unwind them,” said Wendy Cutler, a former US trade negotiator who is now vice president of the Asia Society Policy Institute.

President Donald Trump despises trade deficits — a situation when the US buys more from another country than it sells. In his view, it’s a sign that America is being “ripped off” and treated unfairly. (Economists are much less convinced of his argument.)

Since China is the world’s second-largest economy and a manufacturing supercenter, it’s perhaps unsurprising that, across all trading partners, the US ran the largest trade deficit with Beijing last year, at nearly $300 billion.

Trump has therefore levied the steepest tariffs on China, with rates starting at a whopping 145% for most products. China responded by slapping a minimum tariff of 125% on most US goods. Both countries’ economies are poised to take massive hits from the trade war, and bruises are already beginning to appear on both sides.

Investors and many businesses and consumers from both countries are eager to see the situation improve and are holding out hope that the weekend talks, which mark the first official dialogue between top US and Chinese government officials during Trump’s second term, will help. But it could quickly turn south, too.

Trump’s deal with the UK is hardly a great starting point for trade talks with China

Cutler anticipates that Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, who are meeting with Chinese Vice Premier He Lifeng on Saturday, will bring up the UK trade deal to show that “their policy is working” and also that other countries “have concerns with China.”

Never mind that the scant details of the UK deal reveal it’s a relatively small win — if one at all. And it was also an agreement that was relatively easy to reach.

It helps that the UK had much less to negotiate down, with tariffs on its exports starting at 10% — which, even after the “deal,” remain at those levels. Some cars from there are getting a slight break on tariffs, and the Trump administration seemed to imply other carveouts are on the table. Another positive: The US ran a $12 billion trade surplus with the UK last year.

“It’s basically balanced trade,” Cutler told CNN. China, meanwhile, is “a different animal.”

The best possible outcome

Hardly anyone believes this first round of talks will bring US and Chinese tariffs back to where they were before Trump’s second term. That includes Bessent, who told Fox News earlier this week: “My impression is that this weekend’s discussions will focus on de-escalation rather than a significant trade agreement.”

Trump even outright said he wouldn’t consider lowering tariffs to get China to the negotiating table on Wednesday. But on Thursday, citing unnamed sources, the New York Post reported that the Trump administration was considering plans to cut tariffs on China to as low as 50% as soon as next week.

In that regard, it’s a positive sign that Trump said on Thursday he wasn’t considering levying even higher tariffs on Chinese goods. “You can’t get any higher. It’s at 145, so we know it’s coming down,” Trump said in the Oval Office after announcing the UK trade deal.

Bessent’s comments about de-escalation stood out to Susan Shirk, a research professor at the UC San Diego School of Global Policy and Strategy and director emeritus of its 21st Century China Center.

“What that suggests is that this decoupling, this extreme level of tariffs, is going to move in the direction of coming down either to zero or to some minimal level on both sides,” Shirk said.

Chinese President Xi Jinping and his administration, she said, are acting in a more disciplined manner compared to previous talks with the US. That suggests to her that “they’re not likely to mess it up.”

“They’re skeptical of Trump, and so they’re going to be very careful, which I think puts the right kind of pressure on President Trump,” she said.

Shirk said she’s hoping China demonstrates how “they are making a good faith effort to reduce the flood of exports going not just to the United States but all these other countries.”

In Cutler’s view, the best possible realistic outcome of the weekend talks would be if both sides leave with “a process for further engagement,” she said. Chief among those would be getting the ball rolling on a call between Trump and Xi.

Trump suggested he’d consider speaking with Xi on Thursday depending on how the weekend talks go.

The worst possible outcome

In contrast, the sky is the limit for how bad these talks could go and the actions both governments could take as a result. Both Cutler and Shirk agreed one of the worst-case scenarios would mirror the 2021 talks Biden administration officials held with Chinese officials in Alaska.

That quickly became disastrous for both sides as officials had a very public spat with one another using harsh rhetoric in front of a slew of journalists invited to cover what was initially intended to be brief opening remarks.

“The worst thing that could happen is kind of a big blowup, and the media is there to report it,” Shirk said.

“That’s exactly the type of meeting one wants to avoid,” said Cutler, who also served as acting deputy USTR in the Obama administration.

Alaska repeats aside, the worst possible outcome, she said, is for the US and China to “stake out their hard-line positions and not find common ground to move forward,” which would open the door for even higher tariffs to be imposed.

source : cnn

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Glendon

Economic

Forex

China–U.S. Trade War

US President Donald Trump floated an 80% tariff on China ahead of negotiations due to begin Saturday as he urged Beijing to do more to open their markets to US goods.

“80% Tariff on China seems right! Up to Scott B,” Trump said in a social-media post Friday morning, referring to Treasury Secretary Scott Bessent.

“CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!,” he said in a separate post.

Bessent and US Trade Representative Jamieson Greer are set to begin talks with Chinese Vice Premier He Lifeng in Switzerland this weekend, the first public discussions between the world’s two largest economies on defusing a trade war that has seen Trump impose 145% levies on China and Beijing retaliate with 125% duties on many American goods.

Trump’s comments provided a stark dose of reality to investors who have been anticipating the start of negotiations between the two countries and eager for any sign that the US president will seek an off-ramp to ease a trade war that has roiled equity and bond markets and raised risks of a global downturn.

S&P 500 futures briefly turned negative and, while positive again, are well off session highs. European stocks trimmed gains and the Mexican peso reversed gains. Two-year US yields fell.

Trump levied high tariffs on dozens of nations in April only to quickly pause those import taxes to allow trading partners a 90-day window to negotiate deals with his administration. On Thursday, Trump touted the first of those agreements with the United Kingdom, though that deal appeared to fall well short of the “full and comprehensive” compact he had promised with many of the critical details being left to further negotiations.

Talks with China offer to be even more complicated. Trump earlier this week ruled out preemptively lowering taxes on China in order to help juice the negotiations.

While Trump has said in that he is willing to lower the tariffs on China at some point, the president and his advisers have said US consumers are willing to bear disruptions from the trade war in the form of higher prices and fewer choices to allow his bid to bring more manufacturing jobs to the country to succeed.

Source: Bloomberg Europe

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Adam

Commodity

Crude Oil Edges Higher as Trade Sentiment Lifts Market Confidence

Daily Light Crude Oil Futures

Light crude oil futures moved higher on Friday, breaking above key technical resistance levels at $59.68 and $60.09, with prices also surpassing a minor top at $60.26. The bullish breakout now puts the spotlight on $63.06 as the next price target, followed by the 50-day moving average at $64.10. With previous resistance now acting as near-term support, the $59.68–$60.09 zone is a critical floor for bullish momentum.

US-China Trade Optimism Supports Oil Prices Forecast

Oil markets are pricing in relief as trade tensions between the United States and China—two of the world’s largest oil consumers—appear to be easing. Crude benchmarks rose over 1% Friday, with Brent futures gaining as much as 3% on Thursday, driven by optimism around upcoming talks. U.S. Treasury Secretary Scott Bessent is scheduled to meet Chinese Vice Premier He Lifeng in Switzerland on May 10. Market analysts suggest a formal announcement of trade negotiations and a temporary tariff rollback could lift crude prices by $2 to $3 per barrel.

Chinese Import Resilience Provides Fundamental Backing

China’s April trade data added a layer of support, as exports outpaced expectations and the decline in imports narrowed. While crude imports dipped from March levels, they remained 7.5% higher year-on-year—underpinned by state refiners replenishing stocks during plant maintenance. The data signals ongoing demand resilience, which could stabilize near-term price expectations as global demand concerns persist.

OPEC+ Output Outlook Remains Mixed

The supply side, however, remains a potential cap on gains. OPEC+ continues to signal plans for increased production. Yet according to a Reuters survey, output actually declined in April due to losses in Libya, Venezuela, and Iraq, offsetting scheduled increases elsewhere. This mixed picture from OPEC+ could help limit downside pressure in the short term, particularly if demand-side confidence continues to build.

Bullish Outlook as Technicals and Sentiment Align

With prices now above key technical levels and geopolitical sentiment turning more supportive, the near-term outlook for crude oil is bullish. Momentum could accelerate if the upcoming US-China meeting results in a de-escalation of trade tensions. Barring a surprise from OPEC+ supply increases, traders may target a push toward $63 and beyond in the sessions ahead.