Gold prices (XAU/USD) faced selling pressure for the second consecutive day on Tuesday. Optimism sparked by U.S. President Donald Trump’s decision to postpone tariffs on the European Union boosted risk appetite, reducing demand for safe-haven assets like gold. Additionally, the U.S. dollar (USD) rebounded slightly from near monthly lows, further weighing on gold prices.
Mixed Outlook Limits Aggressive Moves
Despite the recent optimism, uncertainty around Trump’s trade policies persists, tempering market enthusiasm. Concerns are also rising that the proposed sweeping tax cuts and spending bill could worsen the U.S. budget deficit. At the same time, expectations that the Federal Reserve will further cut borrowing costs by 2025 may limit how much the dollar can rally. These factors advise caution against making aggressive bearish bets on gold.
Technical Analysis: Support and Resistance Levels
Technically, gold is trading near a short-term ascending trendline support. If selling intensifies and prices break below the overnight swing low near $3,324-$3,323, gold could slide toward the $3,300 level. This price zone is close to the 100-period simple moving average (SMA) on the 4-hour chart. A decisive break below this SMA would likely open the door to further declines.
Conversely, the immediate resistance stands near Friday’s swing high around $3,366. A sustained move above this level would signal renewed bullish momentum, potentially driving prices back toward $3,400. Beyond that, key resistance is anticipated around $3,430. Breaking this could lead to a challenge of the intermediate resistance zone near $3,465-$3,470, and possibly the all-time high near $3,500 reached in April.
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