Gold's Recent Dip: Will XAU/USD Rebound from $2,982 Support?
Market Overview
Japan
The U.S. market is facing a sharp sell-off following President Donald Trump's announcement of a 10% tariff on all imports, with even higher rates targeting China, the EU, and Japan. This move has reignited fears of a prolonged global trade war, triggering a broad decline across equity futures. The S&P 500 fell nearly 4%, the Dow Jones dropped over 8%, and the Nasdaq plunged—bringing markets dangerously close to bear territory. Global investors are shifting toward defensive assets, fueling widespread risk-off sentiment across financial markets. Investor sentiment has shifted to a defensive stance as capital flows out of risk assets like equities and cryptocurrencies. Expectations for the Federal Reserve to cut interest rates by more than 100 basis points in 2025 are being aggressively repriced.
China
The yuan has fallen to its lowest level in over two months in both onshore and offshore markets, driven by concerns over tit-for-tat tariffs. Beijing has imposed a 34% tariff on all U.S. imports and added more American firms to its export control list. PBOC is keeping the daily midpoint fixing relatively firm to avoid sharp devaluation, aiming to maintain financial stability.
Amid this backdrop, the U.S. dollar remains stable against Asian currencies. According to Goldman Sachs, regional central banks are unlikely to favor stronger currencies to protect exports. However, some differentiation is expected across USD/Asia pairs, with the Philippine peso likely to outperform due to its domestically driven economy. Trade tensions have raised fears of a slowdown in China’s growth, especially if the yuan is not allowed to weaken further to absorb the tariff shock.
XAU/USD
Prediction: Decrease
After reaching an all-time high of $3,167.57 on April 3, gold experienced a sharp correction, hitting a more than three-week low at $2,970 in early trading on April 7. Currently, prices have rebounded to around $3,025, indicating dip-buying interest around the strong support zone at $2,982. While the medium-term bullish structure remains intact, the short-term trend is temporarily tilted toward a correction.
FUNDAMENTAL ANALYSIS
Monetary Policy & Fed Impact:
Fed Chair Jerome Powell warned that recent tariff hikes are increasing the risk of higher inflation and slower growth, complicating the path of future monetary policy. This has led markets to expect the Fed may keep interest rates elevated for longer, while also raising concerns about potential over-tightening.
Inflation & Market Drivers:
Gold dropped more than 3% last Friday as investors were forced to liquidate gold positions to cover losses from other assets during a broad market sell-off driven by global recession fears.
Profit-taking and margin calls triggered a short-term selling spiral, although fundamentals continue to support a medium- to long-term bullish outlook.
This week’s U.S. CPI and PPI reports will be key in determining whether the Fed adjusts its policy stance or maintains higher-for-longer rates.
Geopolitics & Market Sentiment:
The U.S.-China trade war has intensified, with China retaliating by imposing a 34% tariff on all imports from the U.S. and restricting rare earth exports.
President Trump’s announcement of a new wave of tariffs wiped out over $6 trillion in U.S. stock market capitalization, increasing demand for cash and liquidity.
However, in such uncertain times, gold remains a safe haven asset, especially as central banks continue accumulating gold, supporting prices in the medium to long term.
TECHNICAL ANALYSIS
Key Resistance Levels
● $3,038: Nearest resistance, aligned with the 89 EMA – a level that must be breached to resume the bullish trend.
● $3,057: Strong supply zone and the next resistance. A break above this could lead prices to retest the historical high zone of $3,085 – $3,167.
Key Support Levels
● $3,000: A key psychological and technical level.
● $2,982: Strong support and an area where buyers are showing interest, coinciding with the 200 EMA.
● $2,956 – $2,922: The next support zone if the price continues to decline.
● $2,858: A critical support level; if broken, it could confirm a potential reversal of the medium-term uptrend.
Technical Indicators:
RSI: currently around 40.33, indicating a corrective phase. A bounce above 50 could signal a recovery. Previously, the RSI exited the overbought zone (above 70) and formed a slight bullish divergence, supporting the case for a short-term rebound.
Trading Volume: Strong selling pressure is evident from the surge in volume during the recent drop. However, the long lower wick on the candle at $2,982 reflects emerging dip-buying interest.
Price Action:
● If the price holds above $2,982 – $3,000, the market could see a technical rebound towards $3,038 – $3,057 before determining its next direction.
Despite short-term corrections caused by profit-taking and liquidity demand amid a broader market sell-off, long-term fundamentals continue to support a bullish trend. The $2,982 support zone is playing a critical role and may provide traders with a potential entry point depending on price action behavior.
BTCUSD
Prediction: Decrease
Bitcoin is currently in a clearly defined short-term downtrend. The price has broken through the strong support level at $80,000 and is now trading around $78,000, with several bearish signals in both price and volume. The RSI has entered the oversold zone, indicating that selling pressure is dominant. There is no clear reversal signal yet in the current trend structure. Investors should be cautious and monitor deeper support zones for potential trading opportunities.
FUNDAMENTAL ANALYSIS
Impact of Trade Policy & Global Markets:
U.S. President Donald Trump's expansion of global tariff policies has triggered a wave of sell-offs across financial markets, including cryptocurrencies. As of April 5, the U.S. imposed a 10% tariff on all imports, with higher rates targeting China (34%), the EU (20%), and Japan (24%).
Asian stock markets plunged: Nikkei -8%, Kospi -4.6%, Shanghai -5.8%, Shenzhen -7.2%, causing extreme negative sentiment.
Total crypto liquidations over the past 24 hours hit approximately $890.9 million, with $758.2 million in long positions wiped out — indicating the market is heavily influenced by a "Sell Now, Think Later" mentality.
Monetary Policy & Fed Expectations:
The sharp downturn has led markets to price in over 100 basis points in rate cuts by the U.S. Federal Reserve in 2025.
However, amid the risk-asset sell-off, the U.S. dollar is slightly strengthening, adding further short-term pressure on BTC.
Market Sentiment & Internal Crypto Events:
The Crypto Fear & Greed Index has dropped to 23 – Extreme Fear, reflecting a sharply pessimistic mood among investors.
Security concerns like "Bitcoin address poisoning" attacks and the unresolved issue with 390,000 FTX users possibly not being reimbursed continue to weigh on risk appetite.
However, some investors such as Arthur Hayes and Bill Ackman believe this sell-off could serve as a catalyst for the next growth cycle — especially if stimulus measures or monetary easing are introduced.
TECHNICAL ANALYSIS
Key Resistance Levels
● $80,000 – Nearest resistance after the breakdown.
● $85,593 – Aligned with the 200 EMA, a strong technical resistance.
● $88,756 – Major supply zone and Bearish Order Block (OB); if price rebounds, this is a potential strong profit-taking area.
Key Support Levels
● $76,619 – Current support zone; price is testing with slight reaction.
● $73,864 – Stronger support; a break below could lead to deeper downside.
Technical Indicators:
RSI: Currently at 29.27, in the oversold zone → a technical rebound may occur, but confirmation of buying strength is needed.
Volume: Spiked sharply during the drop → confirms heavy selling pressure, possibly indicating “panic selling” or institutional activity. A declining volume near support would increase the probability of a technical bounce.
Price Action:
● Watch for price behavior around $76,600. If a strong rebound occurs, consider a short-term buy setup targeting $80K – $82K.
● If $76,600 breaks, monitor the $73,800 zone for a safer long entry.
● Conversely, if price returns to $80K but fails to break through convincingly, a sell setup to follow the bearish trend may be considered.
The market is currently in a highly sensitive and volatile state due to U.S. tax policy shifts and global market reactions. With a combination of negative technical signals and uncertain fundamental news, investors should prioritize defensive strategies and wait for clear confirmations before taking action.
EUR/USD
Prediction: Short-term Correction within a Medium-Term Uptrend
The EUR/USD pair remains in a medium-term uptrend, marked by higher lows, but is currently under short-term correction pressure after hitting strong resistance around 1.1145. The upward momentum has stalled as global macroeconomic headwinds weigh on risk assets. However, as long as the price holds above the key support level at 1.0875, the broader bullish trend remains intact.
FUNDAMENTAL ANALYSIS
Monetary Policy & Fed Impact:
Investors are increasingly betting that the U.S. Federal Reserve (Fed) will begin cutting interest rates as early as May, amid rising recession risks fueled by the ongoing U.S.–China trade war.
The 10-year U.S. Treasury yield has dropped sharply to 3.89%, reflecting strong expectations of rate cuts (the market is pricing in nearly five rate cuts in 2025).
Fed Chair Jerome Powell struck a cautious tone, noting it’s still too early to determine the policy direction, though markets have already moved ahead in anticipation.
Market Sentiment & Macro Risks:
President Trump maintains a hardline stance against China despite U.S. equity markets losing nearly $6 trillion in capitalization last week. This has fueled concerns about liquidity risks and the potential onset of a global recession.
Safe haven currencies like the Japanese Yen (JPY) and Swiss Franc (CHF) have strengthened significantly, while risk-sensitive currencies like the Australian Dollar (AUD) and New Zealand Dollar (NZD) have sold off — indicating growing risk aversion in the market.
The U.S. Dollar Index (DXY) has declined slightly, reflecting downward pressure from falling yields and capital outflows from U.S. assets.
Inflation & Upcoming Data:
U.S. CPI data expected this week is forecast to rise by 0.3%, though its impact may be overshadowed by recession fears.
Earnings season also begins this week, with many companies expected to avoid issuing forward guidance due to tariff-related uncertainty.
TECHNICAL ANALYSIS
Key Resistance Levels
● 1.1145 – Recent high; a breakout above this level could extend gains toward 1.12 or beyond.
● 1.1008 – Nearby resistance, from which the price recently pulled back.
● 1.0946 – Current testing level; reflects sellers’ resolve.
Key Support Levels
● 1.0875 – Immediate support, aligned with the 34 EMA, crucial for maintaining the uptrend.
● 1.0788 – Stronger support; retesting this could challenge the medium-term bullish structure.
● 1.0720 – Firm long-term support, coinciding with the 200 EMA.
Technical Indicators:
RSI is neutral around 50. Previously, it exited the overbought zone (>80) and is now pulling back, indicating some selling pressure but not enough to reverse the overall trend.
Volume: No significant spikes — suggesting the current move is a natural correction within the broader trend.
Price Action:
● If the price holds above 1.0875, a rebound toward the 1.0946 – 1.1008 resistance zone is likely.
● A break below 1.0875 would shift focus to the next support level at 1.0788.
Overall, EUR/USD is correcting within a prevailing uptrend. Fundamental factors such as Fed rate cut expectations, a weaker USD, and safe-haven flows may continue to support the euro. However, close monitoring of key support zones is essential to determine the next move.
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