Gold price retreats from over one-month highs above $3,400 on Tuesday.
The US Dollar consolidates the downside amid tariff uncertainty and Fed concerns.
Gold price settles Monday above the key Fibo resistance; any downside appears limited.
Gold price is reversing from over one-month highs of $3,403 reached in early Asia on Tuesday as buyers take a breather, awaiting clarity on potential US trade deals before the August 1 deadline.
The latest retracement in Gold price could be attributed to a bout of profit-taking after Monday’s nearly 1.5% rally and ahead of key earnings results from America’s tech giant – Alphabet Inc, this Wednesday.A pause in the USD and US Treasury bond yields sell-off also weighs on the Greenback-priced bright metal.
The fate of Gold price hinges on the USD’s performance, in the face of US President Donald Trump’s tariff talks.Mounting uncertainty over US trade deals with Japan and the EU weighed heavily on the Greenback at the start of the week on Monday, as it revived US economic growth concerns.
Citing some sources. the WSJ reported on Monday that “US officials have informed the EU’s trade chief that President Trump is likely to demand further concessions in ongoing trade talks, including a higher baseline tariff of 15% or more on most European goods, a significant increase from the previously discussed 10%.”EU diplomats noted that the bloc is exploring a broader set of possible countermeasures against the US as doubts over a likely deal rise.
Meanwhile, Japanese political instability cast clouds on a likely US-Japan trade deal before the August 1 deadline.
Additionally, the US currency also felt the heat of the falling US Treasury bond yields amid persistent worries over the Fed independence amid Trump’s repeated calls for Fed Chair Jerome Powell’s resignation.
The record rally on Wall Street indices also diminished the safe-haven appeal of the USD and the attractiveness of the yields, helping Gold price extend Friday’s gains.
Daily technical analysis
As observed on the daily chart, Gold price closed Monday above the 23.6% Fibo level of the April record rally at $3,377.
Meanwhile, the yellow metal holds its position well above all major SMA as the 14-day RSI stays comfortably above the midline, despite the latest downtick.
The technical setup, therefore, appears in favor of Gold buyers, with acceptance above the $3,400 mark needed to take on the static resistance at around $3,440.
Conversely, if the correction extends, Gold price could test the previous resistance-turned-support at $3,377, below which the $3,330 area could lend some support. That zone is the confluence of the 21-day SMA and the 50-day SMA.
Sellers must find a strong foothold below that demand area to test the 38.2% Fibo level of the same rally at $3,297 before targeting the July low of $3,283.
GOLD pulls back before the next leg up
Gold price is reversing from over one-month highs of $3,403 reached in early Asia on Tuesday as buyers take a breather, awaiting clarity on potential US trade deals before the August 1 deadline.
The latest retracement in Gold price could be attributed to a bout of profit-taking after Monday’s nearly 1.5% rally and ahead of key earnings results from America’s tech giant – Alphabet Inc, this Wednesday.A pause in the USD and US Treasury bond yields sell-off also weighs on the Greenback-priced bright metal.
The fate of Gold price hinges on the USD’s performance, in the face of US President Donald Trump’s tariff talks.Mounting uncertainty over US trade deals with Japan and the EU weighed heavily on the Greenback at the start of the week on Monday, as it revived US economic growth concerns.
Citing some sources. the WSJ reported on Monday that “US officials have informed the EU’s trade chief that President Trump is likely to demand further concessions in ongoing trade talks, including a higher baseline tariff of 15% or more on most European goods, a significant increase from the previously discussed 10%.”EU diplomats noted that the bloc is exploring a broader set of possible countermeasures against the US as doubts over a likely deal rise.
Meanwhile, Japanese political instability cast clouds on a likely US-Japan trade deal before the August 1 deadline.
Additionally, the US currency also felt the heat of the falling US Treasury bond yields amid persistent worries over the Fed independence amid Trump’s repeated calls for Fed Chair Jerome Powell’s resignation.
The record rally on Wall Street indices also diminished the safe-haven appeal of the USD and the attractiveness of the yields, helping Gold price extend Friday’s gains.
Daily technical analysis
As observed on the daily chart, Gold price closed Monday above the 23.6% Fibo level of the April record rally at $3,377.
Meanwhile, the yellow metal holds its position well above all major SMA as the 14-day RSI stays comfortably above the midline, despite the latest downtick.
The technical setup, therefore, appears in favor of Gold buyers, with acceptance above the $3,400 mark needed to take on the static resistance at around $3,440.
Conversely, if the correction extends, Gold price could test the previous resistance-turned-support at $3,377, below which the $3,330 area could lend some support. That zone is the confluence of the 21-day SMA and the 50-day SMA.
Sellers must find a strong foothold below that demand area to test the 38.2% Fibo level of the same rally at $3,297 before targeting the July low of $3,283.
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