Market Summary
Gold (XAU/USD) fell nearly 1% to $3,314.99 an ounce on Tuesday, as trade tensions between the United States and its trading partners eased, reducing the precious metal’s appeal as a safe-haven asset. US gold futures also fell 0.7% to $3,325.10.
Earlier, gold hit an all-time high of $3,500.05 on geopolitical uncertainty and concerns over a global recession.
Fundamental Factors
1. Global Trade Tensions
US President Donald Trump’s move to impose a 10% tariff on all imports and a 145% tariff on goods from China has raised the risk of a global recession. However, positive developments in trade talks, including tariff exemptions by China and statements from US Treasury Secretary Scott Bessent on progress with countries such as India, have eased market concerns.
2. US Economic Data
Investors are now focused on upcoming US economic data, including jobs and consumer spending reports, which could influence the Federal Reserve’s monetary policy.
3. Central Bank Demand
JP Morgan predicts gold prices will surpass $4,000 per ounce by the second quarter of 2026, driven by increased demand from investors and central banks, who continue to buy gold as a reserve diversification measure.
Technical Analysis
From a technical perspective, gold prices are showing downward pressure, testing key support around $3,260. A break below this level could open the way for further declines to the $2,975 area, where the previous rally began.
Conversely, if the price manages to hold above $3,300, a recovery towards $3,370 and then $3,400 is likely.
Trading Recommendations
Bullish Scenario: If the price holds above $3,300 and breaks above $3,370, a potential rally to $3,400 and $3,500 could be considered.
Bearish Scenario: A break below $3,260 could open the way for a decline to $2,975.
Strategy: Traders are advised to monitor the development of US economic data and geopolitical tensions, and adjust their trading strategies according to the current market situation.
Ajmal Idlan’s View
In the current context, I see XAU/USD in a very critical “determining zone”. Despite the downward pressure due to better-than-expected US macroeconomic data, the upside potential for gold remains large in the medium to long term — especially with the central bank’s consistent gold buying demand factor.
As a trader, I remain “cautiously bullish” — closely monitoring the $3,260 support area. As long as the price does not break strongly below this zone, buying opportunities ‘on dips’ still exist. However, if a breakdown occurs, I will change my strategy to a defensive or short-term trading approach only.
Always control risk, focus on disciplined position management, and do not let emotions interfere with trading decisions.
Conclusion
The XAU/USD pair is currently in a critical phase, influenced by global economic and geopolitical factors.
Investors and traders need to be cautious and monitor current developments closely to make smart trading decisions.
Reference Sources
Reuters: Gold declines as trade war concerns ease, US data focus
Reuters: JP Morgan sees gold crossing $4000/oz by Q2 2026
FXStreet: Gold price forecast – XAU/USD at a critical juncture
