Gold Price Slips to $3,227 as US-China Truce and CPI Cool Safe-Haven Demand

Gold dipped to $3,227 on Wednesday as US-China tensions eased and inflation data was lighter than expected. The temporary tariff truce between Washington and Beijing (lowering tariffs on low value Chinese goods to 30%) has removed global trade fears. Investors are now more comfortable putting capital back into risk assets and taking it out of gold.

President Trump said tariffs won’t go back to 145% after the 90 day reduction window. He’s confident in a permanent deal and with geopolitics easing gold is vulnerable to more selling especially with prices approaching the $3,200 level.

Inflation Data Fuels Fed Rate Speculation

April’s US CPI rose 0.2% below expectations of 0.3% and in line with traders expectations of 53 basis points of rate cuts in September. Gold traditionally benefits from lower rates and inflation but the modest CPI print didn’t give enough boost to reverse the trend.

Now eyes are on Thursday’s PPI data for more clarity on the Fed’s next move. A soft print could stabilize gold’s decline. But until the data confirms dovishness gold is on the back foot.

Gold (XAU/USD) Technical Outlook

Technically gold is inside a well defined descending channel. After failing to break above $3,257 XAU/USD is back below its 50 period EMA ($3,275) and the bearish momentum is intact. The MACD also supports downside continuation with histogram bars still in negative territory.

Trade Setup:

• Sell Entry: Below $3,204

• Target 1: $3,172

• Target 2: $3,142

• Stop Loss: Above $3,258

As long as gold is below $3,257 the bearish case is valid. A break below $3,204 opens up more downside while a move above $3,257 could be trend exhaustion and a potential reversal.