- Gold price dips on Friday and looks set to close off this week at a loss.
- China says no trade talks are underway with the US, refuting Trump’s claims of ongoing negotiations.
- Traders appear to be buying into the rumours of a deal, pushing stocks higher and reducing their exposure to Gold.
Gold price (XAU/USD) is seeing more profit taking this Friday, erasing all of Thursday’s gains, and looks set to close off this week in the red. The move down comes amid increasing confusion on what is the status of the trade conflict between the United States (US) and China, with US President Donald Trump giving the impression that talks are taking place and China denying it.
In early trading on Friday, Bloomberg released a headline that mentioned China is weighing exempting some US goods from tariffs as costs are rising out of control, throwing markets left and right. At the same time, Bloomberg also reported that the country is preparing emergency plans to deal with external shocks with new finance and policy tools.
Daily digest market movers: China day trading Gold
- After reports from the Swiss National Bank (SNB) booked a 6.7 billion Swiss Francs (CHF) profit on the back of its Gold holdings in the first quarter of 2025, the central bank of Kenya says it is considering adding Gold to its reserves to diversify its foreign-exchange holdings beyond the dollar and other currencies, Bloomberg reports.
- The record-setting rally in Gold and its large intraday moves made waves in China by stoking retail demand, fanning unprecedented trading volumes on the Shanghai exchange and drawing warnings from the authorities, Reuters reports.
- US Treasury Secretary Scott Bessent said the US and South Korea could reach an “agreement of understanding” on trade as soon as next week, Bloomberg reports. More and more headlines on possible trade deal agreements should put downward pressure on Gold.
Gold Price Technical Analysis: Markets choose to believe Trump
The overheated Gold rally looks to be in need of some further cooling. Traders look to be buying into the rumors that a trade deal between the US and China could come very soon, despite China coming out contradicting those rumors. The risk here could be that markets are misinterpreting the US semantic on whether they are “talking” or “negotiating”, and that no deal is done anytime soon with possibly a revisit to $3,500
Looking at technical levels, the daily Pivot Point at $3,335 is the first upside and intraday level that needs to be reclaimed. The R1 intraday resistance saw a small attempt for a test in very early opening this Friday, coming in around $3,381. Further up, Gold price could extend the rally to the R2 resistance at $3,414, surpassing the $3,400 handle.
On the downside, the S1 support this morning briefly broke, though sees price action now reversing back above it, at $3,302. Further down, the S2 support at $3,256 precedes the technical pivotal floor near $3,245 (April 11 high).
XAU/USD: Daily Chart
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
