Gold Rebounds from Two-Week Low as Trade Tensions Ease and Market Eyes Jobs Data

Gold prices stabilized at $3,251 per ounce Friday morning, May 2, 2025, after hitting a two-week low in Thursday’s trading session. The precious metal gained 0.08% in early trading following a sharp 2% decline that pushed prices down to $3,216 the previous day.

The recent pullback represents a 6.1% drop from gold’s all-time high of $3,500.05 reached on April 22. Signals of softening trade tensions triggered the selloff as investors reduced safe-haven positions.

President Trump indicated possible agreements with India, Japan, and South Korea while expressing optimism about reaching a deal with China. U.S. officials have reportedly initiated discussions with China regarding Trump’s proposed 145% tariffs.

This development improved risk appetite and prompted profit-taking in gold. Traders quickly shifted capital toward riskier assets as geopolitical tensions appeared to ease.

Chinese markets remain closed for Labor Day holiday until May 5, creating what analysts describe as a “liquidity vacuum.” The absence of the world’s largest gold consumer has amplified price volatility this week.

Trading volumes surged during the Asian session due to significant liquidation before the holiday. In domestic markets, Indian gold prices reached ₹92,980 per 10 grams for 24K gold.

Vietnamese SJC gold bars traded between 119.3–121.3 million VND per tael. Both markets reflected the global price movement while maintaining typical premiums.

Gold Prices Surge Amid Holiday Liquidations

Technical indicators show gold rebounding from oversold conditions with support at $3,232 and resistance at $3,262. The Relative Strength Index has stabilized above 50, signaling a possible end to immediate selling pressure.

The monthly RSI sits at 84.63, its highest level since February 2008. Market focus has now shifted to the U.S. nonfarm payrolls report due later today. This data will provide critical insights into potential Federal Reserve rate decisions.

The U.S. economy unexpectedly contracted in the first quarter of 2025, fueling speculation about rate cuts later this year. Despite recent correction, investment flows remain robust.

First quarter data showed investment demand doubling year-on-year to 552 tons. ETF demand reached 226 tons during the same period, reflecting strong investor confidence.

Major banks maintain bullish long-term outlooks. JP Morgan projects gold prices reaching $3,675 per ounce by Q4 2025 and exceeding $4,000 by Q2 2026. Goldman Sachs recently raised its end-2025 target to $3,700, citing stronger-than-expected central bank demand.

“There are indications of forthcoming trade agreements, prompting a risk-on trading environment,” said Bob Haberkorn, senior market strategist at RJO Futures. “This results in profit-taking in gold as a safe-haven asset.”

Analysts expect continued volatility as traders balance easing trade tensions against economic uncertainty. Chinese market closure, upcoming U.S. economic data, and shifting safe-haven demand will drive price action in the coming sessions.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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