Gold Rises on Dip-Buying Amid US-China Trade Deadlock

Investors are once again turning to gold as a lifeline amid the relentless stalemate in U.S.-China trade negotiations. Let’s dissect why the yellow metal is soaring despite fleeting optimism about a deal—and what it means for your portfolio.

Gold’s Volatile Journey: Dip-Buyers to the Rescue

Gold staged a comeback on April 25, climbing 1.2% to $3,326.42/oz after a sharp dip the prior day. This rebound wasn’t just about luck—it was a textbook case of dip-buying, as traders scooped up the metal during corrections. But why?

The $3,500/oz milestone looms large. Just days earlier, gold hit a record high of $3,500.05/oz before retreating, but analysts like Kyle Rodda of Capital.com argue this pullback isn’t a sign of weakness. Instead, it’s a buying opportunity fueled by gold’s “strong fundamentals” as a safe haven during global instability.

The weakening U.S. dollar—down 0.2% against major currencies—also supports gold, making it cheaper for overseas buyers. But here’s the kicker: technical factors like Fibonacci retracement levels are now critical. Gold faces resistance at $3,368/oz (the 23.6% retracement), with a clear breach pointing to $3,400/oz. Meanwhile, support hinges on holding above $3,300/oz.

Trade Tensions: The Elephant in the Room

Gold’s gains are inextricably tied to U.S.-China trade dynamics. Let’s cut through the noise:

• U.S. Treasury Secretary Scott Bessent made it clear: excessively high tariffs are unsustainable, but the U.S. won’t budge first. President Trump’s refusal to unilaterally cut tariffs dashes hopes for an immediate deal.
• The IMF warns that existing tariffs are dragging down global growth, with the U.S. economy now projected to grow just 1.8% in 2025—a sharp downgrade from January’s 2.7% estimate.

This deadlock creates a perfect storm for gold. When trade optimism flares (e.g., rumors of a deal), gold dips. But when reality sets in—no progress, more tariffs—investors rush back in. The $3,500/oz mark isn’t just a number; it’s a psychological barrier that could be shattered if tariffs remain unresolved.

Fed Policy: The Dollar’s Weakened Grip

The Fed’s hand isn’t idle either. Markets are pricing in three rate cuts by year-end, which weakens the dollar and lifts gold. The Fed’s Beige Book confirms businesses are holding back on spending due to tariff uncertainty, while the S&P Global PMI shows the services sector sputtering.

This environment isn’t just bullish for gold—it’s structural. Even a modest drop in the dollar or a fresh tariff threat could send gold soaring.

The Bottom Line: Gold’s Uptrend Isn’t Ending Here

Gold’s rally isn’t a fluke. The math is clear:

• $3,500/oz is within striking distance, with $3,368/oz as the next hurdle.
• $3,200/oz is the critical floor—if breached, it could signal a longer-term retreat.
• Analysts like Rodda see gold’s uptrend intact as long as trade tensions persist.

Investors should treat dips below $3,300/oz as buying opportunities. The U.S.-China standoff, combined with Fed uncertainty and slowing growth, ensures gold remains the ultimate insurance policy.

In short: Gold isn’t just rising—it’s rewriting the rules. Stay long-term bullish, but keep an eye on those technical levels. This isn’t a sprint to $3,500—it’s a marathon fueled by fear, uncertainty, and a stubborn trade war.

Final Takeaway: With trade talks stalled and the Fed’s back against the wall, gold’s fundamentals are too strong to ignore. The path to $3,500 is clear—just watch those tariff headlines.