Gold Price Struggles (XAU/USD) persist early Monday, lingering close to the vital $3,265-$3,260 support range.
A modest recovery in the US Dollar and optimism about a US-China trade deal weigh heavily.
Additionally, a sharp decline in China’s gold consumption during Q1 2025 adds to bearish momentum.
Key Points for Gold Price
- Gold price remains pressured near the $3,265-$3,260 support as market sentiment improves.
- Signs of easing US-China trade tensions and a firmer US Dollar weigh on the safe-haven asset.
- China’s gold demand dropped nearly 6% year-on-year in Q1 2025, further hurting gold prices.
- Geopolitical risks and Fed policy expectations could limit deeper losses for gold prices.
- Key US economic data this week could steer gold’s next big move.
Market Context: Gold Market Analysis
Investors are optimistic about a potential thaw in US-China relations after China exempted certain US imports from steep tariffs. Meanwhile, President Trump’s latest comments hint at ongoing discussions with China, raising hopes for reduced trade tensions. Although China has yet to officially confirm these exemptions or ongoing talks, market sentiment remains cautiously upbeat.
Despite some positive developments, Gold Price Struggles as persistent geopolitical risks continue to bolster gold demand.
The prolonged Russia-Ukraine conflict and North Korea’s troop deployment announcement maintain the metal’s safe-haven appeal.
President Trump’s urging of Russia to cease hostilities and US threats complicate global peace efforts significantly.
Technical Insights: Gold Price Struggles Ahead
Gold prices could face deeper losses if sellers force a decisive break below the $3,265-$3,260 support range. A clean move under this level would confirm a bearish breakdown, exposing the 50% Fibonacci retracement near $3,225, and then the $3,200 psychological support zone.
Conversely, any recovery attempts above $3,300 are likely to meet resistance near the $3,331-$3,332 area. Further upside potential remains limited by a major supply zone between $3,366-$3,368. Clearing this range could allow gold to retest the $3,400 mark, with an eye on the $3,425-$3,427 intermediate resistance before any fresh attempt toward the $3,500 peak.
Market Movers:
- US-China Relations: China’s exemption of US imports offers hope for a trade deal, softening safe-haven demand.
- China’s Gold Demand: Gold consumption in China dropped 5.96% year-on-year to 290.492 tonnes during Q1 2025. Jewelry demand fell sharply by 26.85%, while investment in gold bars and coins jumped 29.81%.
- US Dollar Dynamics: The USD holds last week’s recovery gains amid expectations of aggressive Fed rate cuts. Investors anticipate a full percentage point of easing in 2025, limiting USD’s upside but supporting gold partially.
- Geopolitical Risks: Global uncertainty, fueled by ongoing conflict in Ukraine and tensions with North Korea, continues to underpin gold’s safe-haven demand.
Expert Opinions:
According to analysts from Daily Gold Signal, the gold market remains at a crossroads. “Until the $3,265 pivotal support breaks convincingly, expect choppy trading with a slightly bearish bias,” an expert noted.
Meanwhile, market watchers caution that this week’s US economic releases, including JOLTS job openings, PCE inflation data, and non-farm payrolls, could trigger significant volatility in the gold market.
Conclusion:
The gold price remains vulnerable near key technical levels as hopes for a US-China deal and a firmer Dollar limit upside potential. However, persistent geopolitical uncertainties and Fed rate cut expectations could offer crucial support. Traders should watch for a decisive move below $3,260 or above $3,368 for clearer directional clues.
For detailed and real-time analysis on gold prices, visit Daily Gold Signal.
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FAQs About Gold Price Struggles and Market Trends
1. Why is the gold price struggling below $3,300?
The gold price struggles below $3,300 due to easing US-China trade tensions and a stronger US Dollar.
Weaker gold demand from China and hopes of an economic recovery also pressure the precious metal.
2. How does US-China trade news impact gold prices?
Positive developments in US-China trade talks reduce market fears, decreasing safe-haven demand for gold prices.
However, uncertainty about final agreements continues to create volatility in the gold market.
3. What technical levels should traders watch for gold?
Key technical support lies at the $3,265-$3,260 zone, with resistance near the $3,331-$3,368 area.
A break below $3,260 could trigger deeper losses toward $3,225 and the $3,200 psychological mark.
4. How is China's gold consumption affecting gold prices?
China's gold consumption dropped nearly 6% in Q1 2025, weakening global demand for the metal.
Reduced jewelry purchases, due to high prices, further contribute to the bearish outlook for gold.
5. What role does the US Dollar play in gold price movements?
A stronger US Dollar usually pressures gold prices lower because gold becomes more expensive overseas.
However, expectations of future Federal Reserve rate cuts could limit the Dollar’s gains and help gold.
