XAUUSD Struggles to Bounce Back With Traders Eyeing Upcoming US Reports

XAUUSD is moving in a descending channel, and the market has reached the lower high area of the channel

#XAUUSD Analysis Video

Gold has always been that go-to asset people flock to when uncertainty hits. But lately, something’s shifted. For the fourth day in a row, gold prices have continued to drop, and it’s leaving many wondering—what’s really happening?

Let’s dive deep into the reasons behind gold’s recent struggles, what’s influencing the market sentiment, and why we might not see a strong comeback just yet.

The Real Reason Gold’s Losing Its Shine This Week

Lately, gold prices have had a tough run. Despite a few minor attempts at bouncing back, the yellow metal hasn’t been able to regain solid footing. And there’s a mix of reasons for this shift.

One of the biggest drivers? A US federal court decision that made headlines. The court ruled against the “Liberation Day” tariffs proposed by former President Donald Trump. This legal block prevented broad trade duties from taking effect—and markets cheered.

When investors feel optimistic, they often move money out of safe-haven assets like gold and into riskier ones like stocks. That’s exactly what happened here. The court’s ruling sent a strong signal of stability, encouraging more risk-on sentiment. In turn, this dampened the appeal of gold for now.

FOMC Minutes Add More Weight to Gold’s Struggles

Another factor that didn’t do gold any favors was the release of the Federal Reserve’s meeting minutes. These minutes gave a clear message: the Fed isn’t ready to lower interest rates anytime soon.

Why does this matter for gold? Gold doesn’t earn any interest—unlike bonds or savings accounts. So when interest rates stay high (or look like they’ll stay high), investors lean toward assets that actually do offer returns. That’s a natural headwind for gold.

Even though some investors are still betting that the Fed might cut rates sometime in 2025, the cautious language in the recent minutes has many rethinking their outlook.

What’s Going On With the US Dollar?

There’s another twist in this story—the US Dollar.

Usually, gold and the dollar have a bit of a push-pull relationship. When the dollar gains strength, gold tends to slip, and vice versa. That’s because gold is priced in dollars, and a stronger dollar makes it more expensive for overseas buyers.

Lately, the dollar has seen a modest pullback, partly due to concerns over the US fiscal outlook. That’s given gold some light support—but not enough to change the overall downward trend. So while there’s a bit of a cushion here, it’s not enough to stop the slide.

Geopolitical Tensions Are Keeping the Floor from Collapsing

Even with all these headwinds, gold hasn’t completely collapsed. Why?

Because geopolitical risks are still very much in play—and they’re helping to put a soft floor under prices.

Let’s take a look:

Middle East conflicts have flared up again. Israel recently launched an airstrike on the Houthi militant group in Yemen. That was the second time in a month, and it came after missile attacks from the Houthis.
US-China tensions are also heating up. Reports suggest the US government is working on plans to restrict the sale of high-tech materials—like semiconductor tools and specialty chemicals—to China. That’s another layer of trade uncertainty that’s hard to ignore.

XAUUSD is moving in a descending channel, and the market has fallen from the lower high area of the channel

On top of that, Russia is signaling a willingness to engage in new peace talks with Ukraine, but only under specific conditions. With NATO expansion concerns still fresh, the stakes remain high in Eastern Europe.

All these global flashpoints are enough to make investors hesitate before completely abandoning gold. In times of serious conflict, gold tends to shine again, as people seek out stability.

What’s Next? Eyes on Upcoming US Data

Even though gold has been sliding, the story isn’t over. Investors are keeping a close eye on some key US economic reports coming soon.

Here’s what to watch:

Preliminary Q1 GDP numbers will give a sense of how the economy is performing.
Weekly jobless claims could offer clues about labor market health.
And the big one—Personal Consumption Expenditure (PCE) Price Index, due Friday—will give fresh insight into inflation trends.

If these reports signal trouble ahead, gold could regain some momentum. On the other hand, strong numbers might keep the current downtrend in place.

Final Thoughts: Is This Just a Pause or Something Bigger?

So, where does that leave us?

Right now, gold is stuck in the middle of a complicated tug-of-war. Strong economic sentiment and a cautious Fed are weighing heavily on its price. But geopolitical uncertainty and ongoing worries about the US’s long-term fiscal path are stopping gold from falling too far.

Whether you’re a long-term gold believer or just watching the market for now, it’s clear this isn’t just a simple dip—it’s part of a bigger narrative.

As always, gold tends to move when the world feels shaky. And while it’s under pressure today, all it takes is one major global event to shift that sentiment back in its favor.