Insights 
VT 
Key Points
- Spot gold fell 0.7% to $3,334.53, while U.S. gold futures slipped 1% to $3,333.40.
- Trump’s delay of EU tariffs and Memorial Day trading lull contribute to softer demand for safe-haven assets.
Gold prices retreated on Monday as easing trade tensions took the edge off demand for the precious metal. Spot gold slipped to $3,334.53 an ounce, down 0.7% as of 08:48 GMT, while U.S. futures dropped 1% to $3,333.40. This marks a pause in gold’s six-week uptrend, which had been fuelled by geopolitical tensions and tariff threats.
U.S. President Donald Trump reversed his stance over the weekend, shelving plans to impose 50% tariffs on European Union goods beginning 1 June. He reinstated the July 9 deadline for continued negotiations, temporarily defusing one of the key risk factors that had driven gold higher in recent sessions.
UBS analyst Giovanni Staunovo called the pullback “a range-trading day,” attributing the modest decline to tariff relief and thin liquidity due to U.S. and UK public holidays. He noted that “activity is likely to be on the lower end today,” which helps explain the subdued price action despite the metal’s strong weekly performance.
Dollar Weakness Fails to Lift Gold
The U.S. dollar index continued to weaken, touching a near one-month low against major rivals. However, the negative correlation between gold and the dollar offered limited support as broader risk appetite returned to markets. With traders shifting away from hedges, gold faced selling pressure as positions were unwound near the $3,360–$3,370 zone.
Even so, Citi revised its short-term gold forecast, upgrading its 0–3 month price target to $3,500 per ounce, up from $3,150 earlier in May. The bank cited ongoing U.S. fiscal concerns, tariff uncertainty, and persistent geopolitical risks as reasons for a wider trading band between $3,100 and $3,500.
Global tensions remain a wildcard. Russian forces launched a third consecutive night of attacks on Ukrainian infrastructure, following Saturday’s aerial assault that left at least 12 civilians dead. Markets showed little immediate reaction, but further escalation could provide fresh support to gold if risk sentiment deteriorates.
Technical Analysis
Gold surged off the $3281.51 support level, climbing steadily throughout the 23rd of May before peaking at $3365.97 on the 24th. This peak formed a key short-term resistance level, as bulls failed to push higher despite strong momentum early in the move. Price action has since turned lower, breaking beneath the short-term moving averages and forming a descending structure.
Picture: Gold rejects $3365 high, slips back below $3350 as momentum fades and bearish pressure builds near support, as seen on the VT Markets app
The MACD histogram has flipped to negative territory, with a bearish crossover confirming the weakening momentum. Price is now consolidating just above the $3330–$3335 support zone, which could offer temporary relief. However, unless gold reclaims $3356, bears may continue to pressure the metal toward a retest of the $3310 region.
Cautious Forecast
The metal remains range-bound in the short term. Traders should watch for renewed tariff rhetoric, updates on the U.S. fiscal trajectory, and movements in the dollar index as potential catalysts. Broader consolidation between $3,310 and $3,360 appears likely in the coming sessions.
