Gold Price Forecast: Battle Between Bulls and Bears Intensifies Ahead of Crucial US Data

Gold prices are under pressure again on Tuesday, echoing Monday’s early trading action as the precious metal tests a critical support zone around $3,330. Renewed demand for the US Dollar (USD), spurred by improving market sentiment and easing trade tensions, is weighing on the short-term outlook for gold.

Technical Analysis: Gold Faces Key Support at $3,300

On the daily chart, (XAU/USD) is flirting with a breakdown from a three-week-long rising channel pattern. A close below the rising trendline support at $3,300 would confirm a bearish breakout and potentially initiate a deeper correction.

The 14-day Relative Strength Index (RSI) remains above the neutral 50 level, currently at 61, indicating some remaining bullish strength. However, downside momentum is building.

If the $3,300 support fails to hold, the next key zone lies near $3,260. A sustained drop below that could expose gold to further losses toward the $3,215 level (21-day SMA), followed by the 50-day SMA support around $3,068. A deeper decline could see gold revisiting the breakout point of its recent rally near $2,975.

On the upside, if bulls manage to defend $3,300, a rebound toward the $3,370 resistance area is likely. A strong bounce could reignite momentum, targeting $3,400 and eventually the all-time high of $3,500.

Fundamental Outlook: Trade Hopes and Economic Uncertainty Shape Gold Market

Gold’s price action is increasingly tied to developments in US trade negotiations and upcoming economic data. On Monday, US Treasury Secretary Scott Bessent confirmed that several major trade partners had submitted “very good” proposals to avoid tariffs, with India possibly finalizing a deal soon.

US President Donald Trump’s softer rhetoric on China, combined with Beijing’s limited tariff exemptions for select US goods, has improved global risk appetite. This has supported the US Dollar and limited gold’s upside in recent sessions.

However, investor caution remains high as markets await the release of the US Q1 GDP advance estimate on Wednesday. Should the data reveal a contraction, fears of a potential recession could resurface, likely triggering a renewed gold rally as investors seek safe-haven assets.

Until then, gold remains vulnerable to short-term volatility driven by trade headlines, end-of-month portfolio rebalancing, and pre-GDP positioning.

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