Gold Daily | Gold Prices Drop 10% Amid Eased US-China Tensions, Eyeing Rebound at Trendline Support

【Latest Gold Price and Recent Trends】

Gold prices have dropped nearly 10% from their April high of just above $3,500 per ounce, primarily due to easing US-China trade tensions. Spot gold closed at $3,203.14, down 1.13%, marking its worst weekly performance in six months with a cumulative 3.72% drop this week.

【Technical Analysis】

On the daily chart, gold prices have approached a major trendline support, attracting buyers who are eyeing a potential rebound toward new highs. Bearish players might aim for the $2,960 level if prices fall below this trendline. In the 4-hour chart, gold has rebounded strongly near the trendline, approaching key resistance at $3,260, where bears are active. Bulls seek a breakout above $3,260 to potentially drive prices towards $3,360. In the 1-hour chart, a minor support zone around $3,200 is evident, attracting buyers with stop losses below this support as they target a breakout above $3,260. Bears focus on a potential decline below $3,200.

【Market Sentiment and Economic Background】

US-China trade tensions have eased with an agreement to reduce tariffs, improving risk sentiment and decreasing demand for safe-haven assets like gold. The stronger dollar, up 0.2% this week, has made gold more expensive for foreign buyers, contributing to its price decline. Additionally, US economic indicators, including lower-than-expected consumer confidence and retail sales growth, have affected gold market sentiment. Fed officials remain cautious about economic fundamentals and inflation targets, with expectations for a rate cut in 2025, influencing gold's outlook.

【Analyst Opinions】

Analysts suggest that gold remains a favored asset amidst global growth and inflation uncertainties. Despite the current downturn, strong central bank and Chinese investor demand support a bullish outlook. Commodity strategist Nitesh Shah and others see potential for price increases, driven by ongoing demand and underlying economic factors. As physical gold demand improves in Asian markets, the metal's attractiveness as a hedge against geopolitical and economic uncertainties persists.