Gold Daily | Gold Prices Decline Amid Easing Trade Tensions and Rising U.S. Treasury Yields

【Latest Gold Price and Recent Trends】

Gold prices continued their downward trajectory, falling 0.6% to $3,362.59 amid easing trade tensions and rising risk sentiment. This marks the second consecutive day of declines, following a previous 1.3% drop.

【Technical Analysis】

Gold's latest decline positions it between key hourly moving averages, indicating a more neutral short-term outlook. The 200-hour moving average at approximately $3,365 provides support. If this level holds, it suggests buyers are maintaining their stance. However, a fall below this level could shift the short-term outlook to bearish, potentially testing closer to the $3,300 range. Mehta notes that gold needs to break the static resistance at $3,440 to continue its upward trend, with $3,453 and $3,500 as subsequent targets. A breach below $3,377 could lead to support at $3,340, the confluence of the 21-day and 50-day moving averages.

【Market Sentiment and Economic Background】

The anticipated trade agreements between the U.S. and the EU have dampened safe-haven demand for gold. This optimism has overshadowed the impact of a declining dollar, even as the dollar index fell by 0.21%. Rising U.S. Treasury yields, with the 10-year yield increasing by 3.5 basis points to 4.384%, also contribute to the current market dynamics. The potential U.S.-EU trade deal, similar to the recent U.S.-Japan agreement, has fortified risk sentiment in financial markets.

【Analyst Opinions】

Julius Baer analyst Carsten Menke notes that the global trade developments have reduced economic risks and enhanced risk preferences on financial markets, leading to the gold price dip. Despite the cooling of safe-haven buying, central bank gold purchases remain stable, though less robust than earlier in the year. Bart Melek from TD Securities suggests that the expectation of trade agreements is supporting risk appetite, benefiting stock markets. Valencia from FXStreet highlights that while buyers remain in control, they are losing momentum, indicating the possibility of gold maintaining below $3,400 in the short term.