Gold embarks on a consolidative move around $3,200

Gold is holding its own on Tuesday, trading just above $3,200 per troy ounce as it bounces back from earlier losses. While a more upbeat risk sentiment is bolstering the rebound, lingering concerns over a deepening global trade rift have prevented XAU/USD from rallying too aggressively.

Technically, the daily chart for the XAU/USD pair shows that bulls have just paused, yet are far from giving up. Technical indicators resumed their advances within overbought levels, although with limited strength, given that the pair remains below the record high posted last Friday. Meanwhile, the pair stands above all its moving averages, which maintain solid bullish slopes, in line with the dominant bullish trend.

The near-term picture shows that, while technical indicators corrected extreme readings, the XAU/USD pair is consolidating. The 4-hour chart reading suggests XAU/USD could soon resume its run. At the same time, a firmly bullish 20 Simple Moving Average (SMA) provided intraday support, while extending its advance above also bullish 100 and 200 SMAs.

Support levels:3,214.60 3,193.30 3,181.15

Resistance levels 3,231.60 3,245.75 3,260.00

Fundamental Overview

Gold prices held above the $3,200 mark on Tuesday, with the bright metal trading uneventfully around $3,220 a troy ounce. Financial markets maintain an optimistic mood on Tuesday, as no news is good news. United States (US) President Donald Trump has, so far, refrained from fresh threats of tariffs, while speculative interest hopes he could announce another round of exceptions, cooling down speculation that the trade war will dent global growth.

The shortened week due to the Easter holidays adds to the market’s quietness, although the US Dollar (USD) remains out of investors’ radar. The USD trades unevenly across the FX board, yet not far from its recent multi-month lows. Speculative interest still believes Trump’s levies will negatively affect economic progress in the world’s largest economy, while pushing price pressures higher.

The Bank of Canada (BoC) is set to announce its monetary policy decision on Wednesday, while the European Central Bank (ECB) will follow on Thursday. Other than that, the macroeconomic calendar has nothing relevant to offer. The BoC is expected to remain on hold, while the ECB will likely trim interest rates by 25 basis points (bps) each. The focus will be in both cases on policymakers' views of the trade war and its impact on their future decisions.