Risk asset demand puts pressure on gold

Gold starts the week with declining, falling for the third day in a row. The precious metal is pressured by several factors. Global risk attitude has improved, since Donald Trump’s reciprocal tariffs scheduled April 2 were reported to be more narrow and more flexible than expected. This reduces concerns over the negative impact on the global economy, making investors more confident and raising the interest in risk assets. As a result, the demand for gold as a safe-haven asset is declining.

The US dollar is also putting pressure on gold prices. The greenback is holding at its highest level in a week and a half after recovering from the multi-month low reached earlier. This is due to a more dovish forecast of the Federal Reserve (Fed), which kept its expectations of two 25 basis points rate cuts by the end of 2025. However, Fed Chairman Jerome Powell noted that the tariffs may result in decelerating economic growth. At the same time, expectations of rate cuts in 2025 are holding back the yellow metal’s decline. 

Geopolitical tensions in the Middle East are supporting gold. Meanwhile, US delegations are negotiating to resolve the situation in Eastern Europe.

This week, traders will be watching preliminary data on business activity indices (PMIs), which will shed light on the global economy situation. Besides, the US personal consumption expenditures price index (PCE) is due on Friday. The index can affect the Fed rate expectations. 

From the technical point of view, gold prices are in an uptrend on the H4 timeframe. However, reaching the high of $3057.49 formed reversal signals. The Relative Strength Index (RSI, 14) shows a bearish divergence, confirming the weakening upward momentum and indicating a downward trend.

Signal:

The short-term outlook for GOLD suggests selling. 

The target is at the level of 2955.00.

Part of the profit should be taken near the level of 2995.00.

A stop-loss could be placed at the level of 3070.00.

The bearish trend is short-term, so a trading volume should not exceed 2% of your balance.