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Gold Eyes Trump-Xi Meeting Amid India’s Import Restrictions
Gold prices attempted to extend their previous sharp pullback from a three-week high of US$4,774 during Wednesday’s Asian trading session, as markets leaned toward profit-taking ahead of the highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
On the daily chart, XAU/USD traded at $4,692.51, maintaining a mildly bearish short-term tone while hovering slightly above the 21-day Simple Moving Average (SMA) near $4,688 and remaining capped below the 50-day SMA around $4,749. This positioning keeps spot gold under a concentrated medium-term resistance zone, with the longer-term 100-day SMA near $4,788 reinforcing overhead supply pressure. Meanwhile, the 14-day Relative Strength Index (RSI), holding close to the neutral 50 level, signals only moderate directional conviction for now.
On the upside, immediate resistance is seen at the 50-day SMA near $4,749, followed by the 100-day SMA around $4,788 and a broader descending trendline that continues to weigh on rallies. On the downside, initial support comes from the 21-day SMA just below the market near $4,689, while stronger support is located around the 200-day SMA in the $4,335 region, where long-term buyers could attempt to regain control if the current consolidation breaks lower.
Recent weakness in gold prices has been driven by renewed safe-haven demand for the U.S. Dollar alongside rising U.S. Treasury yields, fueled by speculation that the Federal Reserve may keep interest rates elevated due to persistent inflation pressures.
The Greenback consolidated its gains after hotter-than-expected U.S. consumer inflation data, while also benefiting from fading optimism surrounding a potential U.S.-Iran peace agreement.
According to Reuters, the U.S. Consumer Price Index (CPI) rose 3.8% in the 12 months through April, marking the largest year-over-year increase since May 2023, as oil-price shocks linked to tensions with Iran pushed inflation higher.
Gold also faced additional pressure from India, one of the world’s largest gold importers. Indian Prime Minister Narendra Modi on Sunday urged citizens to avoid buying gold for one year in an effort to protect the country’s foreign exchange reserves.
In addition, the Indian government announced on Wednesday that it had increased import duties on gold and silver to 15% from 6% to ease pressure on foreign currency reserves.
Traders also remained cautious ahead of the upcoming Trump-Xi meeting scheduled for this weekend, particularly after Trump stated that trade discussions would take priority over Iran-related issues during the summit with Xi.
Looking ahead, the U.S. Producer Price Index (PPI) data due later in the North American session could provide fresh trading momentum for gold markets.