• Gold outlook remains bullish long-term, but near-term sentiment turns cautious
• $3,000 proves a key battleground in the latest pullback
• Volatility likely to persist as geopolitical risks stay unresolved

Gold suffered a sharp setback at the Asian open, in tandem with global assets, before swiftly paring losses to briefly turn positive. However, it drifted lower once again, trading in the red at the time of writing. The question now: will bullion resume its upward march, or succumb to further weakness alongside the broader risk-off move triggered by fresh tariff tensions out of Washington? For us, the gold outlook has tilted more cautious in the near-term outlook, even if haven demand is going to be elevated amid the market turmoil.

Indeed, it’s been a dire start to the second quarter for risk assets, and volatility shows little sign of easing as markets digest the potential economic fallout of new trade measures.

There was confusion earlier after news emerged that Trump is considering a 90-day pause. This was later denied by Washington. Then Trump announced that “if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th.” This caused fresh wave of selling in stocks, and all the volatility helped to move gold back below the $3K mark.

Can gold stay below the $3,000 line?

Gold had kicked off Q2 in spectacular fashion earlier last week, clocking fresh record highs after a roaring 19% rally in Q1. But the uptrend quickly stalled mid-way through the week as gold slipped in step with the wider market retreat. While its 1.5% weekly drop paled in comparison to silver’s 13% tumble or the Nasdaq 100’s brutal 10% fall, it nonetheless marked a cooling in sentiment.

As the new week unfolds, investor confidence remains delicate. With the trade war rhetoric reigniting, many traders are reluctant to engage until the dust settles. Despite its reputation as a safe haven, gold wasn’t immune to last week’s cross-asset liquidation, where even traditional hedges were sold off to meet margin calls.

All eyes are now on the $3,000 threshold. After dipping to $2,971 overnight, gold swiftly rebounded, reaching an intraday high near $3,055, before drifting back down. Thus, it has been unable to break through the $3,055–$3,058 resistance band — a sign that the sellers are getting control of gold.

The key question now is whether gold will sink decisively below $3,000 later in the week or go back above it. Many traders had pegged that level as crucial, but gold surged right past it last week, climbing as high as $3,170. A pullback was always on the cards after such an aggressive run-up.

It’s worth noting that this move wasn’t driven by deteriorating fundamentals. Rather, it was the equities rout dragging everything down. If stock markets remain under pressure, gold could see further selling as traders raise liquidity — a forced unwinding that’s already underway.

Longer-term fundamentals for the gold outlook remain constructive. Yet, potential geopolitical developments — such as de-escalation in Ukraine or Gaza, as hinted at by President Trump — could dent the metal’s appeal. At present, though, there’s little sign of diplomatic breakthroughs.

There’s also a supply angle to consider. Elevated prices might prompt mining firms to step up production, though supply increases typically lag. Meanwhile, central bank demand may cool at these lofty levels.

XAU/USD technical take: gold outlook turning bearish short-term

Source: TradingView.com

Technically speaking, the price of gold has been flashing overbought warnings across several timeframes, particularly on the higher timeframes — leaving it vulnerable to near-term weakness. The short-term outlook remains tilted to the downside, even though the broader bullish trend is still intact, with higher highs and lows.

That said, if key support levels falter, the longer-term trend could be jeopardised. These are the key zones to watch on the downside:

• $3,000 – Psychological and technical level. A firm break below on a daily close could lead to deeper losses.
• $2,930–$2,956 – Former breakout region; likely to attract dip buyers or prompt profit-taking by shorts.
• $2,790 – October’s high and the intersection with the long-term uptrend line. A critical area for bulls.
• $2,680 – The 200-day moving average, marking the line in the sand for the long-term gold outlook.

On the upside, resistance remains firm at $3,055–$3,060. A break above this could clear the path to retest $3,100 and potentially beyond.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R