Gold loses 2% pressured by profit taking, stronger US dollar and US - China trade negotiations 📉
Gold prices (GOLD) have declined since the metal tested the $3500 area. Today’s session brings another strong downward move, with gold losing 2% and falling back below $3300 per ounce, driven by profit-taking.
- Gold continues to react to news surrounding the U.S.–China trade war. The market’s growing belief in a positive outcome of the negotiations between the U.S. and China is prompting a shift in allocation away from gold towards riskier assets like stocks.
- Today, Bloomberg reported that Beijing is considering easing the 125% tariffs on certain strategically important U.S. imports — a development that has strengthened investors' conviction that a favorable deal between the two countries is still possible, and that China's previously hardline negotiating stance may be softening.
- On the other hand, the Chinese embassy has denied reports of ongoing negotiations with the United States, and if trade war tensions escalate, gold could regain strength. For now, however, the uncertainty surrounding the next steps in the negotiations continues to put pressure on gold prices.
Looking at the chart below, we can see that gold prices (gold chart) started to decline around April 21–22, as the Dollar Index (USDIDX) began to rise. Although 10-year U.S. Treasury yields are falling by nearly 5 basis points today, dollar index futures are gaining more than 0.2%. Meanwhile, final UoM data for April showed slightly improved consumer sentiment, while one-year inflation expectations remained very high at 6.5%.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appSource: xStation5
GOLD (D1, H1)
Analyzing GOLD price action, the price failed to break above the $3500 level, after which a downward correction began.
On the D1 timeframe, the nearest support lies at $3245, corresponding to the lower limit of a 1:1 structure. If this level is breached, the correction could extend toward the horizontal support at $3167. Should this support also fail to hold, the next important area lies around $2960. However, even such a deep correction would not necessarily signal a reversal of the broader trend. The main trend in gold remains bullish, and a pullback toward $2960 would merely represent a test of the 100-day moving average.
Source: xStation5
On the lower H1 timeframe, the price has failed to reclaim the local resistance zone around $3357. This level remains a key short-term resistance. As long as the price stays below it, there is a risk of further deepening the downward correction. Support levels are defined by the D1 timeframe — namely $3245 and $3167.
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
