Gold Daily | Spot Gold Drops 3% as U.S.-China Tariff Reductions Strengthen Dollar and Reduce Demand
Monday, May 12, 2025 8:00 am ET
1min read 【Latest Gold Price and Recent Trends】
Spot gold fell by 3% to $3,224.34, recently hitting a low of $3,216. This decline is driven by a stronger dollar following U.S.-China tariff reduction agreements, reducing gold's appeal as a safe haven.
【Technical Analysis】
In the daily chart, gold continues to retreat due to positive trade news, with buyers likely seeking entry near major trend lines. On the 4-hour chart, the price has dropped to a key support at $3,258, a potential entry point for buyers aiming for a rebound to $3,367 resistance. On the 1-hour chart, the current pullback is defined by a minor downtrend line, where sellers may position, while buyers look for a breakout above this line for bullish bets.
【Market Sentiment and Economic Background】
The U.S.-China trade agreement has reduced geopolitical tensions, impacting gold's safe-haven status. Both sides announced a significant tariff reduction, boosting investor confidence and increasing risk appetite. Additionally, positive developments in Russia-Ukraine, India-Pakistan, and U.S.-Iran negotiations have further eased geopolitical risks, contributing to gold's decline.
【Analyst Opinions】
Analysts note a decreased demand for gold as a safe haven due to easing U.S.-China tensions. UBS analyst Giovanni Staunovo predicts continued short-term volatility in gold prices. Jigar Trivedi from Reliance Securities warns of further potential declines to $3,200 amid a strengthening dollar and reduced geopolitical risks. Meanwhile, analysts suggest watching upcoming U.S. economic data releases for potential impacts on gold prices.
Spot gold fell by 3% to $3,224.34, recently hitting a low of $3,216. This decline is driven by a stronger dollar following U.S.-China tariff reduction agreements, reducing gold's appeal as a safe haven.
【Technical Analysis】
In the daily chart, gold continues to retreat due to positive trade news, with buyers likely seeking entry near major trend lines. On the 4-hour chart, the price has dropped to a key support at $3,258, a potential entry point for buyers aiming for a rebound to $3,367 resistance. On the 1-hour chart, the current pullback is defined by a minor downtrend line, where sellers may position, while buyers look for a breakout above this line for bullish bets.
【Market Sentiment and Economic Background】
The U.S.-China trade agreement has reduced geopolitical tensions, impacting gold's safe-haven status. Both sides announced a significant tariff reduction, boosting investor confidence and increasing risk appetite. Additionally, positive developments in Russia-Ukraine, India-Pakistan, and U.S.-Iran negotiations have further eased geopolitical risks, contributing to gold's decline.
【Analyst Opinions】
Analysts note a decreased demand for gold as a safe haven due to easing U.S.-China tensions. UBS analyst Giovanni Staunovo predicts continued short-term volatility in gold prices. Jigar Trivedi from Reliance Securities warns of further potential declines to $3,200 amid a strengthening dollar and reduced geopolitical risks. Meanwhile, analysts suggest watching upcoming U.S. economic data releases for potential impacts on gold prices.
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