Gold Daily | Gold Prices Drop Below $3300 Amid U.S.-UK Trade Deal Boosting Risk Appetite

【Latest Gold Price and Recent Trends】

Gold prices experienced a sharp drop, falling below $3300 per ounce after the announcement of a "breakthrough" trade agreement between the U.S. and the UK. This agreement boosted market expectations for more similar deals, reducing gold's appeal as a safe-haven asset.

【Technical Analysis】

Spot gold prices plummeted by 1.9%, reaching $3307.58 per ounce. If gold prices rise above $3350 per ounce, there is potential for a rebound towards $3400. However, failing to hold above $3300 might enhance the downward trend, potentially pushing prices towards the cycle low of $3202 per ounce noted on May 1st.

【Market Sentiment and Economic Background】

The U.S.-UK trade agreement, which reduces tariffs and opens more market access for American goods, has improved risk appetite and strengthened the dollar, pressuring gold prices. The upcoming U.S.-China trade talks could further impact gold's appeal, especially with prospects of easing tensions. Despite geopolitical risks, such as the India-Pakistan conflict and Middle Eastern tensions, investor focus is shifting towards economic agreements.

【Analyst Opinions】

Bob Haberkorn of RJO Futures believes that if a U.S.-China trade deal is also achieved, gold prices may face strong resistance, possibly retreating to around $3200 per ounce. Christian Borjon Valencia from FXStreet notes that the improved risk sentiment following the U.S.-UK deal and the rising dollar demand have led to a sharp decline in gold prices. Additionally, the Chinese central bank's approval for banks to purchase foreign exchange for gold imports indicates potential future support for physical gold demand.