The rebound was fueled by a successful retest of a retracement zone between $3228.38 and $3164.23. Buyers also defended the May 1 swing bottom at $3201.95, temporarily halting the bearish momentum. However, the upside appears limited without a move through resistance between $3318.50 and $3351.08, where sellers are likely to re-emerge.

A break below $3201.95 would shift the main trend to down on the daily swing chart and target the next major level at $3145.00—the 50-day moving average. This moving average could act as both a technical magnet and a key sentiment indicator for the rest of the year.

Tariff Truce Sparks Risk-On Trade, Pressures Gold

Gold’s sharp decline on Monday followed the announcement of a temporary U.S.-China tariff truce. The U.S. agreed to reduce import duties from 145% to 30%, while China cut tariffs from 125% to 10%. The agreement eased trade tensions and fueled a rally in global equities, while the U.S. dollar surged to a one-month high—both factors that undercut gold’s appeal.

CPI Report Could Shift Fed Expectations, Influence Gold Price Future

Traders are now focused on the April U.S. Consumer Price Index report, which could shape expectations for Fed policy. Barclays projects headline CPI to rise 0.3% month-over-month (2.3% year-over-year), with core CPI up 0.2% (2.8% year-over-year). Although tariffs were implemented in early April, economists expect little immediate impact on prices due to exemptions and advanced shipments that likely front-loaded inflationary pressure into Q1.

A softer-than-expected CPI print could take pressure off the Fed and weaken the dollar, offering short-term support for gold. However, any upside surprise would likely reinforce expectations for tighter policy, boosting yields and dragging on gold.