Gold Prices Shine Brighter as U.S. Economy Stumbles and Global Tensions Escalate
On Wednesday, June 4, 2025, global gold prices (XAU/USD) recorded a notable increase, rising by over 0.80% to trade around USD 3,382. Earlier in the day, the price had dropped to a low of USD 3,343 before climbing again.
This rise came as weak economic data from the United States placed pressure on the U.S. dollar, boosting the attractiveness of gold as a safe-haven investment. In uncertain times, investors often turn to gold to protect their assets from volatility.
International developments also played a part in the upward movement. Tensions between the U.S. and China flared up once more after President Donald Trump signed an executive order doubling tariffs on imported steel and aluminum from 25% to 50%.
“This move comes just a few days before planned talks between President Trump and Chinese President Xi Jinping. The uncertainty surrounding the negotiations is making gold more appealing to investors looking to hedge against market risks,” said analyst Andy in his daily report on Thursday, June 5.
Trump Points Finger at Fed Chair Powell
President Trump also publicly blamed Federal Reserve Chair Jerome Powell for the disappointing economic figures, calling on the central bank to lower interest rates immediately. The markets responded to this statement, with gold jumping back to USD 3,380 early Thursday.
Pressure is mounting on the Fed to ease monetary policy, especially after recent data from the Institute for Supply Management (ISM) revealed that the U.S. services sector had contracted for the first time in almost a year. This raised concerns about the broader state of the American economy.
Additionally, a labor report from ADP released on Wednesday showed that the U.S. private sector added only 37,000 jobs in May—far below the analyst forecast of 155,000. While the market’s reaction was limited, the data still pointed to a weakening job market.
“Now all eyes are on the Nonfarm Payrolls (NFP) report, expected on Friday. The market is forecasting a gain of 177,000 jobs with the unemployment rate staying at 4.2%,” Andy noted.
Gold May Break Past USD 3,392
Technically speaking, Andy highlighted that gold remains on a strong upward trend. Based on candlestick patterns and Moving Average indicators, the bullish momentum in XAU/USD continues to dominate. The price holding above a key support level suggests strong buying pressure is still at play.
If the current momentum carries on, gold might push through the nearest resistance level at USD 3,392. However, should a reversal occur due to technical factors or a shift in sentiment, the USD 3,344 support level will become critical for traders to watch.
Considering the rising tensions between the world’s two leading economies and signs of a slowing U.S. economy, Andy concluded that gold is likely to remain in demand among investors seeking to shield themselves from uncertainty.
