gold prices have made a notable recovery from a weekly low of $3,260, with renewed buying interest emerging on Thursday. This trend mirrors the previous day’s movements in the Asian markets, suggesting a shift in sentiment amidst ongoing trade discussions.
Investor attention is now focused on the negotiations between the United States and its trading partners, particularly China and Japan. A sense of cautious optimism permeates the markets as they reflect on recent developments surrounding trade talks. The rally in global stocks, initially sparked by a more conciliatory stance from the U.S. administration on trade relations and the Federal Reserve, appears to have stalled for the moment.
Simultaneously, the U.S. Dollar has begun to retreat from its recent recovery, grappling with concerns that weigh on investor sentiment. Reports indicated that the White House might consider reducing tariffs on Chinese imports, but these claims were later countered by Treasury Secretary Scott Bessent, who clarified that no unilateral offer was on the table. This back-and-forth underscores the uncertainty surrounding trade policy, which continues to be a significant influence on the gold market.
Compounding the situation, a downturn in the S&P Global US PMI Composite Output Index — falling to its lowest level in 16 months — has raised concerns about potential economic slowdowns, potentially paving the way for more aggressive monetary policy adjustments by the Fed in the near future.
Looking ahead, disappointing German business sentiment could impact the EURO ’s strength, possibly increasing demand for the Dollar and pressuring gold prices. However, ongoing trade negotiations remain a pivotal factor, as inconsistent messages from the Trump administration create a volatile environment.
From a technical standpoint, the current short-term outlook for gold appears favorable for buyers, with the 14-day Relative Strength Index indicating upward momentum. If the upward trend persists, gold may surpass the $3,400 level on its way to challenge record highs near $3,500. Conversely, should selling pressure mount, a decline toward the 21-day Simple Moving Average at $3,175 may be on the horizon, particularly if it dips below $3,260.
