Gold prices have fallen below $3,350 due to rising US yields and a stronger US Dollar. Improved risk appetite, driven by US-China and EU-US trade talks, has reduced demand for gold, putting pressure on XAU\/USD to stay above triangle support.<\/p>\n
Gold is currently trading under $3,330, down over 1%, pressured by higher US Treasury yields. The recent US Durable Goods Orders report showed a 9.3% decline in June, less severe than expected but a notable drop from May’s 16.5% increase.<\/p>\n
Easing global trade tensions have led to a pullback in gold prices, as tariff negotiations with the European Union progress. Upcoming US-China trade talks are poised to impact risk sentiment and gold demand, with potential tariff adjustments influencing market dynamics.<\/p>\n
US Initial Jobless Claims have decreased, indicating a robust labour market, which supports higher yields and strengthens the US Dollar. Markets are anticipating a 62.3% chance of a 25-basis-point Fed rate cut in September, although caution remains due to unresolved trade issues.<\/p>\n
Gold’s price is under threat as it nears breaking an ascending triangle support level. If key support levels are breached, a further decline might be seen, though the overarching uptrend could persist if these levels are maintained.<\/p>\n
Given the current pressure on gold, which recently dipped below $2,330, we believe traders should consider bearish positions. The sustained strength in the US Dollar, with the DXY index trading above 105, alongside high US 10-year Treasury yields hovering around 4.4%, creates a difficult environment for the metal. We would look at buying put options to profit from a potential drop below the key technical support level.<\/p>\n
The labor market’s surprising strength, evidenced by the recent addition of 272,000 jobs in the Non-Farm Payroll report, makes an immediate case for a stronger dollar. This robust economic data reduces the likelihood of imminent and aggressive rate cuts from the central bank. This lessens the appeal of holding a non-yielding asset like gold.<\/p>\n
Market expectations have adjusted accordingly, with the CME FedWatch Tool now showing the probability for a rate cut in September has fallen to around 50%. This is a significant shift that points to interest rates remaining higher for longer, which historically puts a cap on gold’s price. Therefore, selling out-of-the-money call options or establishing call credit spreads could be a prudent strategy to collect premium while betting that prices will not rally significantly.<\/p>\n
The easing of global trade tensions is another factor that diminishes the metal’s role as a safe haven. Progress in tariff negotiations removes a layer of fear from the market, encouraging investment in riskier assets over bullion. We see this improved risk appetite as a continuing trend that will weigh on prices in the coming weeks.<\/p>\n
We are watching the ascending triangle support very closely, as a break below this level could accelerate selling pressure. Historically, periods combining a strong dollar and restrictive monetary policy, like the one we are in now, have not been kind to precious metals. A failure to hold the current technical formation would signal a deeper correction is likely underway.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold dips below $3,330 as stronger US Dollar, yields, and easing trade tensions reduce safe haven demand.<\/p>\n","protected":false},"author":62,"featured_media":16974,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27359","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27359"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27359\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16974"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}