Gold Price Slips as USD Rebounds, But Geopolitical Risks Offer Support

Gold Price Slips as USD Rebounds, But Geopolitical Risks Offer Support

June 3, 2025 – Precious Metals Market Insight

The Gold price (XAU/USD) has retreated from a four-week high, marking a corrective pullback during Tuesday's European session as the US Dollar (USD) stages a modest rebound. The precious metal trades with a mild bearish bias, though macro uncertainty continues to lend underlying support.

Moderate USD Strength Pressures Gold

The mild uptick in the US Dollar, after falling to multi-week lows, has applied downward pressure on Gold prices. A stronger USD generally reduces demand for commodities priced in Dollars, like gold. However, the move appears corrective, with buyers cautious ahead of key economic data.

Fed Rate Cut Bets and Fiscal Concerns Limit Downside

Despite short-term pressure, market expectations that the Federal Reserve (Fed) will cut interest rates later in 2025 are acting as a counterbalance. Slower inflation and a fragile fiscal backdrop in the US could limit USD upside and make non-yielding assets like Gold more attractive.

Related reading: Why Gold Rallies on Rate Cut Expectations

Geopolitical and Trade Risks Offer Safe-Haven Demand

Persistent geopolitical tensions, including concerns in the Middle East and the rising US-China trade friction, are keeping risk sentiment subdued. These dynamics typically drive investors into safe-haven assets like Gold, especially in times of policy and economic ambiguity.

Key Technical Levels for XAU/USD

• Immediate Support: $3,340
• Resistance Zone: $3,365–$3,375
• Trend Bias: Neutral to bullish above $3,340
• Short-Term Outlook: Consolidation likely, with upward potential if USD weakens again

Outlook Ahead: All Eyes on JOLTS Report

Investors now turn to the upcoming US JOLTS Job Openings report for fresh insights into the labor market. A weaker-than-expected release could renew USD selling pressure, potentially lifting Gold back toward recent highs.

Related Articles on Tredu.com:

• XAU/USD Technical Levels to Watch This Week
• Gold vs. USD: How They Move in Crisis
• How Geopolitics Drives Safe-Haven Flows