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Gold Prices Drop Below $3,250 on US-China Trade Deal and Bullish USD Sentiment

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  • May 12, 2025
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Gold prices have fallen sharply below the $3,250 mark as bullish sentiment on the US-China trade deal and a stronger US dollar negatively impact the precious metal. The pact between the two nations to cut tariffs significantly has improved global risk sentiment, causing investors to move away from safe-haven assets such as gold. In the meantime, soothing US recession concerns and the Federal Reserve’s aggressive interest rate hawkishness have also continued to prop up the dollar, further weighing on gold prices. With market focus now shifting to future US inflation readings and Fed Chairman Jerome Powell’s testimony, traders are expecting further gold declines, particularly if the price breaks below crucial support levels. KEY LOOKOUTS • The release of the next US inflation numbers later this week will be closely watched, as they may affect market expectations for future Federal Reserve action, specifically on interest rates, that would impact the outlook for gold. • Powell’s on-stage appearance on Thursday may further clarify the Fed’s thoughts on rate cuts, potentially sparking yet more US dollar strength and prolonging bear pressure on gold. • The long-term implications of the US-China tariff reduction agreement will also influence global risk sentiment in the future. If tensions in trade continue to ease, demand for safe-haven assets such as gold may still be muted. • Be on the lookout for price breakdowns below the $3,250 level, especially around the $3,200 level, which can serve as a point for more losses. Alternatively, a bounce above $3,300 may point towards potential short-covering and price reversal. With gold prices still falling below the $3,250 threshold, a number of influential factors are at play. The new US-China trade deal, which constitutes a substantial lowering of tariffs, has supported risk appetite at the international level, encouraging investors to move away from safe-haven instruments such as gold. This combined with the Federal Reserve’s aggressive approach to raising interest rates and the strength of the US dollar has further put pressure on the precious metal. Traders are now waiting for significant events, such as the publication of US inflation data and statements by Fed Chair Jerome Powell, which may offer key information about the future trajectory of both gold and the dollar. Furthermore, technical levels near $3,200 are still pivotal, with a break of this support potentially causing further falls for gold. Gold prices are under stress, declining below $3,250 due to optimism for the US-China trade deal and a stronger dollar dulling the appetite for the metal. Gold’s near-term direction will probably be determined by significant market events, such as US inflation numbers and Fed Chairman Jerome Powell’s upcoming remarks. •  Gold prices have declined below the level of $3,250, a major fall in the market. •  The US-China trade tariff cut accord has enhanced overall risk sentiment worldwide, dampening the demand for safe-haven assets such as gold. •  Optimism over the trade agreement and the Federal Reserve hawkish pause has been favorable for the US dollar, placing added pressure on gold prices. •  Positive developments in the trade front have succeeded in tempering fears over the possibility of a US recession, further diminishing gold’s attractiveness. •  The $3,200 level is still a key support level for gold, and any breakdown below it could trigger further losses. •  Traders are looking forward to US inflation data releases that could shape expectations of future Fed rate hikes and affect gold prices. •  We will be looking for any new signals in Powell’s testimony that could give direction for both the US dollar and gold in terms of future monetary policy. Gold prices have remained under pressure with prices dipping below the $3,250 benchmark as market sentiments change following news of a development in the US-China trade discussions. The easing of tariffs among the two nations has triggered sentiments in global markets, promoting the risk-on position that reduces appetite for safe-haven assets such as gold. As investors disengage from risk-off positions, the price of gold has continued to decline, noticeably. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView Apart from the trade agreement, the US dollar has picked up strength as recession concerns eased and the Federal Reserve maintained its hawkish interest rate stance, which weighed further on the price of gold. The market now awaits major economic events, including the announcement of US inflation figures and comments from Federal Reserve Chairman Jerome Powell, that can shape investor sentiment and potentially give fresh direction to the precious metal in the days to come. TECHNICAL ANALYSIS Gold prices have slid below $3,250, led primarily by a spike in optimism over the US-China trade deal, which has given global risk sentiment a boost. The tariff-cutting accord between the two countries has prompted investors to shift away from safe-haven investments such as gold, directing attention to risk-sensitive investments. Moreover, the solidifying US dollar, bolstered by declining recession fears and the hawkish tone at the Federal Reserve regarding interest rates, has also dented gold’s attraction. While markets wait for major economic reports, such as US inflation figures and remarks by Fed Chair Jerome Powell, the future of gold is uncertain. FORECAST Gold prices may recover somewhat if the market responds to any surprise negative economic data or geopolitical tensions that revive demand for safe-haven assets. Furthermore, if inflation readings come in higher than anticipated or if Fed Chairman Jerome Powell indicates a more dovish approach to interest rates, it may soften the US dollar and boost gold’s upside. Gold could also draw support if investor sentiment shifts toward caution again, especially if trade negotiations between the US and China breakdown or face some setbacks. To the downside, gold may suffer additional pressure if the US-China trade deal optimism continues to underpin global risk-on sentiment. A firmer US dollar, boosted by the Federal Reserve’s hawkish bias and upbeat economic data, can provide additional pressures to gold’s decline. If inflation figures indicate stabilization and the Fed holds its aggressive stance on interest rates, the allure of gold might decrease further still, with

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Commodities Gold

Gold Clings Above $3,000 Despite Pullback, Poised for Weekly Gain as Strong US Dollar and Geopolitical Tensions Sustain Prices

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  • March 22, 2025
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Gold prices fell for the second day in a row on Friday, dropping to about $3,019 as investors took profits and the US Dollar gained strength. Gold is still poised for weekly gains, however, driven by escalating geopolitical tensions and uncertainty in the market. The strong position of Federal Reserve officials, with no hurry to lower interest rates in the face of economic uncertainty and the effect of President Trump’s trade policy, has also added strength to the Greenback. Rising tensions in Gaza have meanwhile contributed to market anxiety, sustaining gold’s safe-haven appeal despite momentum indicators pointing towards a possible short-term correction. KEY LOOKOUTS • Short-term pullbacks notwithstanding, gold’s resilience in remaining above the psychological $3,000 level reflects underlying bullishness and further potential for the price to go higher if investors buy back. • The strengthening US Dollar and the dovish stance of Fed officials, who don’t see an immediate need to reduce interest rates, still depress gold prices short term. • Gaza violence and increasing geopolitical tensions may provide support to gold as a safe-haven asset, keeping investors in suspense. • The nearest support is at $3,020, then the key $3,000 and $2,954 levels. On the upside, a move above $3,050 may lead the way to the $3,100 Gold traders are keenly observing key factors that may determine price action in the next few days. In spite of recent profit-taking and the strength of the US Dollar, gold’s resilience to remain above the pivotal $3,000 level indicates sustained investor appetite. The Federal Reserve’s conservative approach to interest rate reductions and increasing US Treasury yields are pinning down bullion, but geopolitical tensions—most notably the renewed hostilities in Gaza—are sustaining gold’s safe-haven demand. Market participants will also be watching key technical levels, support around $3,020 and resistance at $3,050, which might dictate the direction of XAU/USD in the next session. Gold continues to hold up above the $3,000 level despite temporary profit-taking and a firmer US Dollar. Geopolitical tensions and the Fed’s hawkish tone remain at play and continue to affect market sentiment, with investors ready to watch out for key technical breakouts. • Gold prices fall for the second day in a row but stay above the $3,000 mark. • Gold is poised to record weekly gains despite the retreat, driven by market uncertainty. • US Dollar gains as investors react to Fed’s conservative approach to rate cuts. • Fed officials signal no hurry to loosen policy, citing economic uncertainty and Trump’s tariffs. • Geopolitical tensions increase as Israel renews attacks in Gaza, fueling safe-haven demand. • Technical perspective indicates short-term support at $3,020 and major resistance at $3,050. • Momentum indicators indicate a possible short-term pullback, but long-term trend is bullish. Gold prices have remained resilient this week, holding firm despite a temporary dip towards the close of the trading sessions. The market still struggles with a stronger US Dollar, fueled by cautious indications from Federal Reserve officials who have reaffirmed their policy of keeping interest rates unchanged in the face of economic uncertainties. With no imminent intention to loosen monetary policy, investors are closely watching how trade policies, particularly the effects of newly imposed tariffs, will influence the overall economic outlook in the next few months. XAU/USD Daily Price Chart Chart Source: TradingView Grappling with market tensions are mounting geopolitical threats, especially in the Middle East. The recent restart of hostilities in Gaza after a two-month ceasefire has ratcheted up global uncertainty. Such events usually heighten demand for safe-haven assets such as gold since investors want insulation from possible worldwide instability. Despite short-term threats, long-term economic and geopolitical issues continue to underpin the role of gold in diversified investment portfolios. TECHNICAL ANALYSIS Gold still shows a widely bullish trend in spite of recent declines. The metal has managed to hold above the important psychological level of $3,000, reflecting strong underlying support. Momentum indicators such as the Relative Strength Index (RSI) do, however, indicate a short-term loss of bullish momentum, with the index having fallen for the second day in a row. If selling pressure intensifies, gold may test lower support zones at $3,020 and major resistance at $3,050 , while a rebound above recent resistance could reignite upward momentum. Traders are closely watching these key levels to determine the next directional move. FORECAST Gold prices could see a fresh rally in the coming sessions. A sustained move above recent resistance levels may open the path toward higher targets, potentially revisiting the $3,050 zone and beyond. Sustained geopolitical tensions, uncertainty over global trade policies, and any economic softening would further enhance the safe-haven appeal of gold. And on the Federal Reserve front, any change in tone to a dovish position could be the trigger for fresh bullion buying interest. Conversely, if profit-taking persists and the US Dollar stays firm, gold could experience more downside pressure. A breakdown below the $3,000 psychological level would instigate a more serious correction, sending prices down to the next support levels. Increasing US Treasury yields and ongoing hawkish messages by Fed officials could also hamper sentiment, inducing transitory losses in gold’s positive trend. Unless key support levels are broken decisively, however, the overall outlook should still remain positive in the medium term.

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Commodities Gold

Gold Price Reaches Two-Week High as Trade Tensions, Fed Rate Cut Speculation Continue to Fuel Bullishness

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  • March 13, 2025
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Gold prices have continued to push higher, touching a two-week high as trade tensions, expectations of a Fed rate cut, and a lower US Dollar drive strong support. Concerns that the economic costs of President Trump’s tariffs on steel and aluminum imports would prompt the EU and Canada to respond with their own measures have fuelled demand for safe-haven assets such as gold. In addition, hopes for multiple rate cuts this year by the Federal Reserve amid a slowing labor market and decreasing inflation have only added to gold’s allure. With the US Dollar close to multi-month lows, technical considerations indicate that gold could go higher, potentially into its all-time high of $2,956. KEY LOOKOUTS • Concerns about increasing US President Trump tariffs and heightened trade tensions against the EU and Canada remain pushing safe-haven demand for gold. • Gold’s attractiveness grows with hopes for several Federal Reserve interest rate reductions this year under diminishing inflation and signs of moderation in the labor market. • A low US Dollar, closer to multi-month lows, contributes to further bullish support for gold, which has made it an even more sought-after asset for alternative assets investors. • Gold’s recent breakout above major resistance levels indicates additional upside potential, with the all-time high of $2,956 within reach if the momentum continues. Gold prices have been trending higher, fueled by fears of rising trade tensions, especially President Trump’s tariffs and retaliatory actions by the EU and Canada. These concerns have prompted investors to seek refuge in gold. Moreover, anticipation of several Federal Reserve rate reductions in the course of this year, driven by the evidence of deceleration in the labor market and decelerating inflation, has supported the attractiveness of gold further. The US Dollar, downgraded to multi-month levels, still supports gold, with it remaining an investor darling. With technical levels pointing toward ongoing momentum, gold is looking to test its record high, which further entrenches the bull case for the metal. Gold prices are rising, boosted by increasing trade tensions and Federal Reserve rate cut hopes. Weakness in the US Dollar is also boosting gold’s attractiveness, bringing it near its all-time high. • Increasing fears surrounding US tariffs and retaliation from the EU and Canada are compelling investors to seek safety in havens such as gold. • Wagers on several Federal Reserve rate reductions this year are supporting gold, as diminishing rates enhance the attractiveness of non-yielding assets. • A battered US Dollar, close to multi-month lows, is also lending support to gold, making it more appealing to investors. • Concerns over possible economic repercussions from trade wars and slowing inflation are still driving demand for gold. • A break above crucial resistance levels, such as $2,928-2,930, indicates additional upside potential, potentially reaching its record high of $2,956. • A lower-than-expected US inflation reading has boosted the rate cut expectations further, supporting gold’s price rally further. • While geopolitical uncertainties increase, gold continues to be a top choice as a hedge against market uncertainty, showing strong upward momentum in the short run. Gold prices have been trending higher on increased concerns about trade tensions, mainly President Trump’s steel and aluminum tariffs on foreign imports and resulting retaliations by the EU and Canada. Such fears of future economic slowdown are prompting investors towards gold, long regarded as a safe-haven investment when markets are uncertain. The growing market volatility from the current trade tensions has further driven demand for gold, as it is seen as a safe store of value amid geopolitical uncertainty. GOLD DAILY PRICE CHART CHART SOURCE: TradingView Besides trade worries, hopes for several Federal Reserve rate cuts throughout the year have also helped to increase gold’s appeal. With signs of a cooling labor market and easing inflation, many market participants are betting that the Federal Reserve will ease monetary policy, which supports non-yielding assets like gold. Meanwhile, a weakening US Dollar continues to provide favorable conditions for gold, as it makes the precious metal more attractive to investors looking for alternatives. Consequently, gold is in a solid uptrend, with investors following developments in the global economy very closely. TECHNICAL ANALYSIS Gold prices have demonstrated strong bullish momentum, overcoming key resistance levels, such as the $2,928-2,930 range, opening the way for additional potential on the upside. The price action suggests gold is ready to test its all-time high of $2,956, with oscillators on the daily chart still firmly in positive ground, indicating room for further extension without touching overbought levels. So long as gold remains above the pivotal $2,930 support level, the outlook is good, and the rising trend can extend towards new highs. FORECAST Gold prices are set to maintain their rising trend, driven by persisting trade tensions and a softening US Dollar. As investor worries regarding the economic effect of tariffs and the risk of slowing down remain, demand for safe-haven gold should be firm. Furthermore, if Federal Reserve rate-cut hopes become a reality, this will add support to gold, taking prices to the all-time high of $2,956. With technical indicators continuing to reflect positive momentum, gold may break resistance levels and experience additional gains in the near future. Conversely, however, if the geopolitical environment stabilizes and trade tensions subside, there may be a gold price pullback as investor interest in safe-haven investments dissipates. A better-than-expected economic recovery or more aggressive Federal Reserve tightening of monetary policy could also blunt the attractiveness of gold. In these situations, gold could come under pressure, dropping back towards support levels near $2,912-$2,900 and potentially even lower in the event of a shift in favorable market conditions toward risk assets.

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Commodities Gold

Gold Price Dives to Three-Week Low in Face of Steeper USD and Fed Policy Sentiment Uncertainty

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  • February 28, 2025
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Gold (XAU/USD) prices have fallen to a three-week low, closer to the $2,850 level, after a steeper US Dollar and anticipation of the Federal Reserve extending its hawkish policy pushed it lower. While there has been a risk-off market mood as well as lower US Treasury bond yields, the precious metal persists in its bearish trend for the second session in a row. Investors are waiting with bated breath for the coming US Personal Consumption Expenditure (PCE) Price Index, an important inflation gauge that may shape the Fed’s interest rate view and dictate gold’s short-term direction. Technicals also paint a bearish picture, with more room for decline if support levels are broken. KEY LOOKOUTS • A generally firmer USD continues to weigh on gold prices as investors expect the Federal Reserve to remain hawkish in the face of ongoing inflation fears. • The release of the upcoming US Personal Consumption Expenditure (PCE) Price Index is likely to impact Fed interest rate decisions and may determine the direction of gold in the near future. • Gold has dropped below the 23.6% Fibonacci retracement level, which could mean an extended decline if major support levels near $2,800 hold firm. • Investors are wary of global economic risks, such as possible inflationary pressures from Trump’s planned tariffs on Canadian, Mexican, and European Union imports. Gold prices continue to decline, hitting a three-week low of about $2,850 as a firmer US Dollar and the anticipation of a hawkish Federal Reserve dampen the market. Investors are eagerly awaiting the next US Personal Consumption Expenditure (PCE) Price Index, an important inflation indicator that may affect the Fed’s interest rate policy and, in turn, gold’s direction. Gold is still under selling pressure despite a risk-off mood and declining US Treasury yields. Technical indicators are signaling further weakness if major support levels, especially around $2,800, are broken. Moreover, market anxiety regarding possible inflationary impacts from Trump’s proposed tariffs against Canada, Mexico, and the European Union contributes to uncertainty in gold’s near-term direction. Gold prices declined to a three-week low around $2,850 due to a stronger USD and the anticipation of a hawkish Fed. Market participants are waiting for US PCE inflation data that could have implications for interest rates and gold’s direction. Technical indicators indicate more downside if support levels are breached. • XAU/USD declines around $2,850 as a stronger US Dollar weighs down on the market. • The US Dollar remains on the mend with expectations of a hawkish Federal Reserve. • Market participants look to the US Personal Consumption Expenditure (PCE) Price Index for guidance on the Fed’s next step. • Policymakers focus on taming inflation, dampening expectations of rate cuts. • Gold falls below the 23.6% Fibonacci retracement level, indicating further losses if major support around $2,800 breaks. • In spite of market uncertainties, gold finds it difficult to attract safe-haven demand. • Tariffs on Canada, Mexico, and the EU can affect inflation and guide gold’s direction. Gold prices continue to be pressured due to a firming US Dollar and anticipation of a hawkish Federal Reserve depressing market sentiment. The US Personal Consumption Expenditure (PCE) Price Index, which is a key inflation indicator, is in the spotlight as market participants seek guidance on future interest rate action. As inflation fears continue, Fed policymakers have signaled a prudent stance towards cutting interest rates, supporting the Dollar’s strength. Moreover, recent evidence of steady US economic growth also makes the argument for maintaining interest rates high, which diminishes the appeal of non-yielding assets such as gold. XAU/USD Daily Price Chart Chart Source: TradingView Apart from monetary policy, geopolitical and trade-related concerns contribute to the uncertainty. Investors are intently watching proposed tariffs by former US President Donald Trump on imports from Mexico, Canada, and the European Union, which can be inflationary in nature. These trade measures can influence global economic stability, shaping market sentiment for safe-haven assets. In the meanwhile, falling US Treasury bond yields and general risk-off market conditions have not gone far in favor of gold since traders are staying guarded before critical economic data and policy indications. TECHNICAL ANALYSIS Gold has fallen beneath significant support points, suggesting potential extension of its corrective decline. The price has fallen below the 23.6% Fibonacci retracement line of the rally from December through February, portending growing bearish momentum. Daily chart oscillators are establishing negative momentum, supporting the chance for further falls. If the sellers force the price down below the $2,855 level, the next major support is close to the $2,834 area, and then the 38.2% Fibonacci of $2,815-$2,810. A clear fall below the psychological $2,800 level could seal a bearish reversal. Conversely, a bounce above $2,867 might encounter resistance around the $2,885-$2,900 area, with continuous buying potentially revealing the all-time high of $2,956. FORECAST Gold may strengthen if future US economic releases, especially the PCE Price Index, indicate decelerating inflation, leading to hopes of a dovish Federal Reserve. A lower inflation reading can raise the chances of interest rate reductions, weakening the US Dollar and strengthening demand for gold as a safe-haven. Should gold recover the $2,867 resistance level, it may probe the $2,885-$2,900 zone, while a sustained breakout may propel it towards the $2,915 level. Stronger follow-through buying could take prices even closer to the lifetime high of $2,956 as buying interest picks up. Against the downside, gold will continue to be at risk if inflation does not recede and Fed officials continue to hint at a hawkish bias, underpinning the resilience of the US Dollar. A failure at levels above $2,855 would unleash a further bout of selling pressure that would push the price towards $2,834 support. A firm break beneath the $2,815-$2,810 zone would invite a slide toward the important psychological level of $2,800. If fear prevails, further losses look likely, that could push the price below $2,780, indicating an extended correction off recent highs.

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