Gold Price Forecast: XAU/USD wavers around $4,700 with all eyes on Trump-Xi meeting outcome
- Gold is hovering around $4,700, with no clear bias, as investors await news from the summit between Trump and Xi in Beijing.
- Trump said that the first meeting with Xi, held earlier on Thursday, was "great".
- Concerns about the fragility of Iran's ceasefire and rising hopes of Fed hikes are weighing on precious metals.
Gold (XAU/USD) is trading flat on a particularly calm market session on Thursday, with investors awaiting developments from a two-day summit between US President Donald Trump and his Chinese counterpart, Xi Jinping, in Beijing.
Safe-haven flows triggered by the uncertainty about the ceasefire in Iran and higher US Treasury yields, following hot US inflation figures earlier in the week, are providing support to the Greenback. Still, traders are reluctant to take decisive positions ahead of the outcome of the high-stakes summit in China.
Trump affirmed that the first meeting with Xi was “great” after two hours of talks held earlier on Thursday. Reports by Reuters, citing White House sources, say that both leaders agreed on the need to reopen the Strait of Hormuz, whose closure has boosted Oil prices by more than 40%. The same source also affirmed that the status of Taiwan, considered the most controversial issue on the agenda, was not mentioned at the meeting.
Technical Analysis: Sideways consolidation around $4,700
XAU/USD keeps consolidating without a clear bias after last week's recovery from the after $4,500 area. The 4-hour Relative Strength Index (RSI) is hovering around the 50 line, hinting at a neutral tone, while the Moving Average Convergence Divergence (MACD) remains in negative territory but contracting, which suggests easing downside momentum.
Immediate support remains at the weekly floor at around the $4,640 level, which is holding bears for now. A confirmation below here would lure sellers into a retest of the $4,500 level. Further down, the March 26 low near the $4,350 area comes next.
On the topside, Monday's high around $4,750 is expected to challenge bulls, ahead of the mid-April highs in the area of $4,880. If that level is broken, the March 17 high, near $5,040, will appear on the horizon.
(The technical analysis of this story was written with the help of an AI tool.)
Gold FAQs
Why do people invest in Gold?
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Who buys the most Gold?
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
How is Gold correlated with other assets?
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
What does the price of Gold depend on?
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
