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The price of gold fell on Monday, dropping to 3,290 USD per troy ounce amid easing market tensions.

Key factors driving gold’s decline

The sell-off in the safe-haven asset was driven by reduced risk aversion, as trade tensions between the US and China showed signs of easing. This weakened gold’s appeal as a traditional hedge against uncertainty.

Earlier, US President Donald Trump hinted at a potential softening of his tough trade stance towards China, signalling the possibility of tariff negotiations. On Friday, China exempted certain US goods from its 25% tariffs, though Beijing stopped short of confirming any scheduled trade talks with Washington.

Additional downward pressure came from a strengthening US dollar, which made dollar-priced gold more expensive for foreign investors.

Upcoming US economic data in focus. This week, a raft of key US economic indicators will be released, including:

• The first estimate of Q1 2025 GDP
• Core PCE inflation data for March
• April employment figures

These reports could provide fresh clues on the Federal Reserve’s next policy moves and the broader economic outlook.

Technical analysis: XAU/USD

On the H4 chart, XAU/USD is forming the fifth structure in the first wave of decline to the 3,232 level. A move to this target level seems likely. Further, a correction to the level of 3,365 is possible. After completing this correction, a new wave of decline to the 3,100 level is probable. The target is local. Technically, this scenario is confirmed by the MACD indicator, with its signal line under the zero level and directed strictly downwards.

On the H1 chart, XAU/USD has formed a consolidation range around the level of 3,300, and with an exit down, a decline to 3,232 is probable. Today, the fifth wave of the decline to at least 3,232 seems highly likely. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under the 50 level and directed strictly downwards to the 20 level.

Conclusion

Gold remains vulnerable to further losses amid improving US-China trade sentiment and a stronger dollar. Traders will closely monitor upcoming US data for further directional cues.

French ECB Governing Council member Francois Villeroy de Galhau expressed confidence today that there is no imminent recession risk for either France or Europe, while inflation continues to decline.

Speaking to RTL Radio, Villeroy also reaffirmed that the ECB retains "a gradual margin for rate cuts", despite global uncertainties.

Villeroy also issued a strong warning about the risks stemming from US trade policies. He criticized the administration's protectionist stance, saying it was "playing against the US economy and unfortunately also against the world economy."

He stressed that protectionism ultimately leads to "less growth and more inflation."

Despite the fact that President Trump’s earlier decision to impose tariffs (at higher rates than expected) shook the stock markets, the S&P 500 index (US SPX 500 mini on FXOpen) could still end April without significant losses (currently trading less than 2% below the month’s opening level) or even achieve a positive result.

According to media reports, around 180 S&P 500 companies are expected to release their quarterly earnings this week, including Apple (AAPL), Amazon (AMZN), Coca-Cola (KO), Eli Lilly (LLY), Meta (META), Microsoft (MSFT), and Chevron (CVX).

The share prices of these major companies — some of the largest by market capitalisation — could have a substantial impact on the S&P 500 index chart (US SPX 500 mini on FXOpen), given that their combined weight accounts for approximately a quarter of the index calculation.

Technical Analysis of the S&P 500 Chart

Based on the key price actions marked on the chart, we can identify a descending trend channel for the US stock market, which has been in effect since mid-February.

At the same time, the price has:

→ moved into the upper half of this channel, reaching its upper boundary;

→ found support around the median line (as evidenced by the price action on 21 April).

These are bullish signs, reinforced by the aggressive nature of the rebound from the psychological 5,000-point level, which acted as significant support in the first few days following the tariff announcement. Bears may still see an attractive opportunity to attempt to resume the downward momentum of the S&P 500 index (US SPX 500 mini on FXOpen), but will the fundamental backdrop support such a move?

From an optimistic perspective, sharp impulses driven by corporate news could lead to a breakout above the upper boundary of the red channel. This would likely be facilitated by important announcements (particularly from senior officials in the US, China, and Europe) regarding de-escalation of the tariff situation.

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Daily Pivots: (S1) 190.23; (P) 190.98; (R1) 192.00; More...

Intraday bias in GBP/JPY remains on the upside at this point. Rise from 184.35 would target 195.95 resistance next. Firm break there will suggest that choppy decline from 199.79 has also finished too. On the downside, below 189.28 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 208.09 are seen as a correction to rally from 123.94 (2020 low). Strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. However, sustained break of 175.94 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 162.27; (P) 163.01; (R1) 164.02; More...

Intraday bias in EUR/JPY remains neutral as range trading continues. On the upside, firm break of 164.16 will resume whole rise from 154.77. Next target will be 100% projection of 154.77 to 164.16 from 158.27 at 167.66. However, break of 158.27 will bring deeper fall back to 154.40/77 support zone.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Strong support should be seen from 38.2% retracement of 114.42 to 175.41 at 152.11 to contain downside. However, sustained break of 152.11 will bring deeper fall even still as a correction.

Daily Pivots: (S1) 0.8515; (P) 0.8532; (R1) 0.8552; More...

Intraday bias in EUR/GBP stays neutral for the moment. Further rise is expected as long as 0.8518 support holds. On the upside, 0.8622 minor resistance will bring retest of 0.8737 first. Firm break there will resume the larger rally from 0.8221. However, sustained break of 0.8518 will bring deeper fall back to 55 D EMA (now at 0.8450).

In the bigger picture, down trend from 0.9267 (2022 high) should have completed at 0.8221, just ahead of 0.9201 key support (2024 low). Rise from 0.8221 is likely reversing the whole fall. Further rise should be seen to 61.8% retracement of 0.9267 to 0.8221 at 0.8867 next. This will remain the favored case as long as 0.8472 resistance turned support holds.

Daily Pivots: (S1) 1.7672; (P) 1.7743; (R1) 1.7835; More...

Intraday bias in EUR/AUD remains neutral for the moment. Corrective pattern from 1.8554 could extend, but downside should be contained by 38.2% retracement of 1.5963 to 1.8854 at 1.7750. On the upside, above 1.8014 minor resistance will bring retest of 1.8554 first. Firm break there will resume larger up trend. However, firm break of 1.7750 will bring deeper fall to 55 D EMA (now at 1.7369).

In the bigger picture, up trend from 1.4281 (2022 low) is in progress for 100% projection of 1.4281 to 1.7062 from 1.5963 at 1.8744. Firm break there will pave the way to 138.2% projection at 1.9806, which is close to 1.9799 (2020 high). Outlook will remain bullish as long as 1.7062 resistance turned support (2023 high) holds even in case of deep pullback.

Daily Pivots: (S1) 0.9390; (P) 0.9418; (R1) 0.9435; More....

Intraday bias in EUR/CHF is turned neutral first with current retreat. Rebound from 0.9218 is either a corrective move, or the third leg of the pattern from 0.9204. In either case, further rally is expected this week as long as 0.9336 support holds, towards 0.9660. However, break of 0.9336 will bring retest of 0.9204/18 support zone.

In the bigger picture, prior rejection by long-term falling channel resistance (now at 0.9555) retains medium term bearishness. That is, down trend from 1.2004 (2018 high) is still in progress. Firm break of 0.9204 (2024 low) will confirm resumption. This will remain the favored case as long as 0.9660 resistance holds.

Markets

US yields drifted further south on Friday in a generally technically driven trading session. Net daily changes ranged between -5 and -8.4 bps in a bull flattening move. The US 10-yr yield is testing support offered by the recent lows and by the lower bound of a short term upward trading channel. Bunds underperformed with yields inching higher up to 3.4 bps at the front, suggesting the recent (ECB) repricing stretched far enough. The 2-year yield’s downside around 1.6% seems well protected. The same goes for Germany’s 10-yr yield around 2.5%. Stocks rose both in Europe and the US with the S&P 500 taking out resistance around 5500. The dollar finish higher across the G10 currency board but that had no technical implications. The trade-weighted DXY index stayed sub 100 & EUR/USD remained near 1.14. USD/JPY rose from 142.6 to 143.6. US Treasury outperformance, rising (US) stocks and an appreciating greenback suggests some of the tariff dust settled for the time being. There is still huge uncertainty but barring any new (verbal) shocks we could see a shift from the sell-on-upticks in the US to some sideways consolidation. Focus meanwhile goes to the trade negotiations during the 90 day tariff “grace period” which the US says have been going well for a number of countries. With the symbolic first 100 days of his presidency coming up, Trump may indeed be eager to announce an agreement “in principle” left and right. Today’s economic calendar in any case lacks market moving potential, adding to the case of consolidation instead. That does change from tomorrow on though with the JOLTS job openings and Conference Board consumer confidence due in the US and the first national CPI and Q1 numbers in the euro area. The EMU growth number is scheduled for release on Wednesday as is that for the US, accompanied by PCE inflation. Thursday’s headliners are the US manufacturing ISM and the Bank of Japan with April payrolls starring on Friday. The heavy, backloaded economic calendar offers a great opportunity to check whether economic data, especially in the US, will have regained importance compared to the previous weeks.

News & Views

Rating agency S&P on Friday downwardly revised the outlook on the sovereign credit rating of Belgium from stable to negative. The long term credit rating remains at AA. The agency said the negative outlook reflects heightened risk regarding Belgian’s budgetary consolidation, given the already high government debt of 104% of GDP in 2024. The agency in this respect mentions that the risks from the current tensions could weigh on Belgium’s economic growth prospects as a key commerce hub in Europe. The agency takes notice of agreement of the Arizona coalition on the 2025 budget outlining a budget deficit reduction path in line with the seven year reform plan submitted on the EC excessive debt procedure. The plan is expected to halt the rise in the deficits, which could reach 6.0% in 2027 without policy measures, and the decrease it to 3.0% in 2030, but S&P mentions significant challenges to the implementation including the complex regional negotiations and a possible social backlash. Rising defense spending is also seen as likely to slow the pace of fiscal consolidation.

Rating agency S&P also downwardly revised the outlook on the Slovak credit rating from stable to negative. The long term sovereign rating remains at A+. The negative outlook reflects the risks that global trade tensions could weigh on the projection for Slovakia’s medium-term growth, against the backdrop of the high export exposure of its economy. It also could hamper the government’s fiscal consolidation efforts and keep its debt ratio on an upward trend. The Slovak government has started an ambitious fiscal consolidation. S&P projects that the measures will reduce the deficit to around 3%-4.% of GDP by 2027, from 5.3% in 2024. However, due to the trade uncertainty, S&P lowered the GDP growth projection from 2025-26 to just over 1.0%. Slovakia's automotive-heavy economy is vulnerable to U.S. tariffs, and the associated uncertainty detracts from external demand and consumption that is already subdued. EU-funded investments and the German fiscal package will provide some support for the economy. S&P also assesses that the government will aim to preserve sound relations with the EU while the domestic political climate remains polarized.

The week starts with mixed feelings. Market mood improved last week as US President Donald Trump eased pressure on Federal Reserve (Fed) Chair Jerome Powell, announced some progress with trading partners including Japan and India, and said that the triple-digit import taxes on Chinese products will probably be ‘substantially’ revised lower. And happily, we heard no major bombs from Trump or his administration over the weekend. It could hardly get better than this given the situation. So, the week starts with some optimism.

China said it’s confident it could hit its 5% growth target by deploying suitable policy and fiscal responses. On the individual front, BYD announced last Friday that it doubled its profit in Q1 to roughly $1.3bn – that’s more than three times the money Tesla made last quarter! The company’s shares in New York jumped more than 5% on Friday and closed the session some 4.30% higher, while the shares are down by around 4% this morning in HK.

Tesla, on the other hand, jumped almost 10% on Friday and more than 25% last week despite announcing a 70% drop in net profit... Elon Musk’s announcement that he will spend less time at DOGE helped, along with the news that the Transportation Department’s new framework on crash reporting will expand the types of autonomous vehicles that can be tested on American roads. Self-driving cars are exactly where Elon Musk wants to make a difference moving forward – along with humanoid robots – but I am not sure the latest news is worth a 25% jump when the brand value has taken a decent hit from Elon Musk’s political implications.

Anyway, the week starts on a mixed note. Chinese equities are flat despite the government’s efforts to boost stimulus. The Japanese Nikkei trades lower in the early hours of the trading week. The Bank of Japan (BoJ) is expected to make no changes to its policy this week, but the hotter-than-expected inflation figures released last Friday fueled hawkish BoJ expectations, and the yen’s recent strength against a broadly softer US dollar also makes Japanese companies more expensive for foreign investors. As such, the Nikkei is down by more than 10% since January and has room to extend losses. The USDJPY remains offered around the 144 mark, weighed down by a broadly weaker US dollar amid concerns over the wide economic damage expected from Trump’s tariff policies. The pair will likely re-test the 140 level to the downside and could make a sustainable move below this level.

In the US, the S&P500 posted its second-best week of 2025 last week. The meagre flow of bad headlines over the weekend is encouraging, but US futures are pointing to a soft start to a week full of earnings. This week, oil giants and four of the Magnificent 7 companies will report their earnings, and their results could potentially throw a floor under the Trump-led selloff — if Trump doesn’t spoil the market mood.

But trade news remain concerning. I came across a chart showing the impact of the latest tariff escalation between the US and China, and it shows that cargo ships leaving China for the US dropped by more than 30% since April 2nd... That – and the fact that Chinese goods will see their prices rise significantly in the US in the coming weeks are highly concerning. We are talking about triple-digit price hikes – a set of 10 kitchen towels on Shein, for example, is posting a 377% price increase as the US will no longer keep the ‘de minimis’ exemption for small-value shipments in place. Hence, it will be very interesting to watch the supply chain disruptions, potential shortages of goods on US shelves, and the impact on overall inflation and growth in the US... considering that consumer spending makes up around 70% of US GDP.

Speaking of which, the US will reveal its first reading for Q1 GDP. A consensus of analyst estimates on Bloomberg suggests economists expect the US economy to have grown by just 0.4% in Q1 — compared to 2.4% printed a quarter before Trump entered the White House. If you think that’s bad, well, that’s much better than the 2.5% decline that the Atlanta Fed’s GDPNow forecast predicts for Q1 growth. And remember, the impact of tariffs is just from uncertainty for now; they haven’t even taken effect.

Note, however, that a soft GDP number could at least encourage the Fed to cut interest rates sooner rather than later. We have already started to hear some Fed members shifting toward that thinking last week, hence a soft GDP figure could further revive that hope and support the market, as the 2.5% decline has already been widely priced into the major US indices: the S&P500 fell nearly 10% in Q1 and dropped up to 20% after the April 2nd tariff announcement...

Across the Atlantic, we will have a close look at the early CPI updates for the major Eurozone economies in April. The softer the data, the higher the expectation of European Central Bank (ECB) cuts to support the underlying economies — and the better the appetite for the euro and European assets. The euro and European futures are slightly better bid this morning, in contrast to the US dollar and US futures, hinting at a potential return to the divergence in appetite seen in Q1 — this time driven by a diverging inflation outlook that could allow for a more supportive ECB, while keeping the Fed inflation-cuffed.