GOLD Analysis
Afternoon: Gold Dips Below $3,380 as US–China Talks and Fed Outlook Weigh on Safe-Haven Demand
Highlights:
- Gold retreats below $3,380/oz as imminent US–China trade talks and expectations of a Fed rate pause curb safe-haven flows.
- Key technical pivots at $3,355 support and $3,410 resistance frame next directional moves; a close below $3,355 could expose $3,320.
- Market attention turns to German Factory Orders, Euro-zone retail sales, US Crude Inventories, and today’s Fed rate decision for fresh catalysts.
Overview:
Gold prices slipped below the $3,380 per ounce mark amid confirmation that U.S. and Chinese officials are slated to meet this week—a development that dampened safe-haven demand by raising hopes for a swift de-escalation of the trade war. The conflict reignited when President Trump raised tariffs on Chinese goods to 145% last month while simultaneously easing duties on most other trading partners, prompting Beijing to retaliate with steep levies of its own. The upcoming negotiations in Beijing are viewed as a critical juncture: markets see any substantive progress as likely to relieve cost pressures on global supply chains and reduce economic uncertainty, thereby sapping one of gold’s primary bullish drivers.
Overlaying the trade narrative is the U.S. Federal Reserve’s policy decision later today. Despite mounting political calls for easier monetary policy, including from the White House, consensus forecasts anticipate that the Fed will hold interest rates steady and maintain its policy statement’s cautious language. Investors will closely dissect Fed Chair Jerome Powell’s post-meeting remarks for any nuance on the timing of future rate cuts. Even a hint of sustained hawkish resolve—or a reluctance to commit to near-term easing—could bolster real yields and further constrain gold’s appeal.
On the fundamental front, the backdrop remains mixed. Persistent geopolitical risks—from U.S.–China tensions to lingering concerns over global growth—continue to provide a floor under gold. However, recent data have been uneven: while safe-haven bids have emerged sporadically, stronger-than-anticipated U.S. labor market readings and resilient consumer spending have limited the urgency for gold as an inflation or recession hedge.
From a technical perspective, gold’s breach of the $3,380 level opens the path toward the next key support at $3,355, with a decisive close below that zone potentially targeting $3,320. On the upside, resistance is positioned at $3,410, which—if reclaimed—could invite short-covering and a run toward the recent peak near $3,450.
Looking ahead, the market’s focus will shift to several high-impact data releases. In the Euro Zone, German Factory Orders and retail-sales figures will gauge consumer and industrial demand. In the United States, weekly Crude Oil Inventories will inform energy-demand expectations, while the Fed’s announcement of the Federal Funds Rate will set the policy tone for the months ahead. Together, these events will shape gold’s supply-demand outlook and influence near-term volatility.
Trading Strategy
- Action: Selling Gold from 3379-80$ or Lower CPR Boundary targeting 3355$ place a stop-loss above $3410 to protect against a renewed breakout.