Daily Price Outlook
Gold (XAU/USD) failed to stop its downward trend and slipped to $3,331, marking a 1% decline as the safe haven appeal weakened ahead of the anticipated announcement of a major trade deal between the United States (US) and the United Kingdom (UK).
Thus, the decline came after expectations of reduced uncertainty, as US President Donald Trump was set to confirm a trade deal with the UK at a 14:00 GMT news conference in Washington. Although the details of the deal were not confirmed, the UK government had already stated that an agreement would be revealed.
Gold Weakens Amid Safe Haven Outflows as Trade Deal Expectations Rise
However, the possible US-UK trade deal has pressured gold prices, as investors move away from safe-haven assets. With hopes for reduced trade tensions, markets have become more optimistic, shifting capital away from gold.
Investors are preparing for a less uncertain environment, expecting the deal to be part of a broader solution in global trade. President Trump's social media posts about the deal have also boosted optimism in the markets.
Fed’s Steady Rates and Strong US Outlook Weigh on Gold Prices
In addition to the trade deal, gold prices fell after the Federal Reserve kept interest rates between 4.25% and 4.50%. Fed Chairman Jerome Powell said the US economy remains strong but warned that the full impact of tariffs and uncertainty will be clearer later this year.
He also said the Fed isn’t in a hurry to cut rates, and markets don’t expect any cuts before summer, which made gold less attractive to investors.
Gold's Long-Term Appeal Remains Strong Amid Global Uncertainty
Despite short-term drops in gold, it remains attractive in the long run, with many hedge funds still seeing it as a safe haven due to global trade uncertainties.
Waratah Capital Advisors Ltd. has a strong position in gold, expecting more demand for it as a way to protect wealth during trade disruptions.
Investors are also looking to gold for growth as they seek to safeguard their assets amid global instability.
GOLD (XAU/USD) – Technical Analysis
Gold is trading near $3,337, struggling to hold the 50-hour simple moving average (SMA) at $3,384 after a sharp rejection from the 23.6% Fibonacci retracement level at $3,381.
The price is currently testing the 50% Fibonacci retracement at $3,325, a critical support level, with the 61.8% level at $3,301 acting as a potential next downside target if selling pressure continues.
The short-term outlook remains bearish, with a potential sell entry below $3,350 targeting $3,300, while a protective stop-loss above $3,382 reduces downside risk.
A close below the 61.8% level at $3,301 could accelerate the decline toward the $3,265 support, completing a potential three black crows pattern on lower timeframes, confirming further weakness.
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