Insights 
VT 
Gold prices have rebounded, trading above $3,335, following initial losses. Despite a perceived lack of substance in the new US-UK trade agreement, gold has seen a recovery due to market concerns about the forthcoming China-US meeting.
Gold (XAU/USD) saw a near 1.0% increase, climbing above $3,335. President Trump suggested an 80% tariff on Chinese goods, adding uncertainty ahead of the trade discussions in Switzerland.
Saturday’s talks in Geneva, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, target reducing tariffs to below 60%. Expected progress could lead to tariff reductions as early as next week.
Technical Analysis
On the technical side, resistance points are at $3,336, $3,384, and $3,462, while support is at $3,258, $3,245, and $3,210. These levels indicate key areas for price movements.
Interest rates, determined by central banks, influence currencies and gold prices. Higher rates strengthen currencies but generally decrease gold prices, increasing the opportunity cost of holding gold. The Fed funds rate influences monetary policy decisions, impacting market behaviour and interest rate expectations.
The rebound in gold – now trading just above $3,335 – reflects how investor sentiment can swiftly turn when geopolitical concerns regain focus. Despite early declines, uncertainty surrounding the upcoming China-US talks in Switzerland has provided meaningful support to precious metal prices. One might have expected gold to lag after a rather unremarkable US-UK trade announcement failed to inspire markets. Instead, this recovery highlights how quickly risk appetite can shift on potential shocks from major economies.
It’s worth noting that renewed tensions were sparked by Trump’s mention of an 80% tariff on Chinese exports. While this wasn’t accompanied by policy detail, it unsettled traders enough to increase safe-haven bids. Consequently, attention turns to Saturday’s high-level discussions in Geneva, where Bessent and He aim to bring tariffs below 60%. The possibility – not mere hope – of reductions being confirmed within days adds an element of timing pressure that has likely supported gold’s near 1% rally.
Monitoring Market Reactions
We’ll need to monitor Treasury statements and soundbites post-Geneva very closely. If diplomatic tone softens or a procedural roadmap emerges, markets may start repositioning even before tariffs officially change. Price action in gold will reflect those shifts quickly. In particular, it would be prudent to watch for moves through the resistance at $3,336 – which, in recent sessions, has behaved as a key ceiling. Should trading volumes support a daily close above that level, the next upside targets come at $3,384 and $3,462. Each of these thresholds corresponds to past reaction highs and visible chart congestion.
On the other hand, retracements shouldn’t be dismissed if talks falter. In that case, support around $3,258 becomes the first area of interest, followed closely by $3,245. Only a move to $3,210 would suggest deeper pullbacks and possibly a return to pre-rebound levels. These should not be brushed aside as isolated markers – wide interest from large funds can often cluster around these technical areas, amplifying volatility.
Interest rate expectations remain the key macro driver in the background. The Federal Reserve’s current cycle has seen rates elevated in an attempt to contain inflation; and while that’s generally pressure for gold, shifts in rate forecasts can override the broader directional pull. If market belief begins to solidify around a policy shift – perhaps even in response to weaker inflation prints or stronger-than-expected jobless claims – then gold may find renewed inflows from yield-sensitive traders.
Remember, holding gold yields nothing in terms of coupons or dividends. As such, when central banks raise rates, the opportunity cost of parking funds in non-yielding assets rises. But if there’s even a whiff that the Fed will pivot, or that forward curves soften, we’ve historically seen gold find buyers almost immediately. Traders are positioning portfolios around not just where rates are — but where they’re expected to go.
At this point, it makes sense to stay nimble, especially as volatility around these meetings and rate decisions can spike. Use technical zones to assess potential entries and monitor rate expectations via Fed funds futures and swaps pricing. What happens in Geneva won’t stay in Geneva – markets are listening.
