⚡Gold tumbles 2%

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%.

Source: 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