Gold Loses Luster: Trade Truce and Rate Pause Weigh on Prices

Gold lost its shine as trade war tension eased. It hit an intraday low of $3135  and is currently trading around $3142.

Trade Truce Dulls Gold's Appeal

The easing of US-China trade tensions, with tariffs reduced and a 90-day pause, has removed gold's safe-haven demand, causing prices to dip sharply. The agreement has caused an international relief rally, bolstering the US currency and lifting equities, while gold plummeted, hitting a one-month low of $3,174.62 per ounce on May 14, 2025, and falling by Rs 213 per gram in India. The gold flight is attributed to increased investor appetite for risk and lower-than-expected US inflation data. While some analysts remain positive in the longer term on gold due to ongoing geopolitical concerns and economic woes, the short-term trend suggests more trade easing and strong economic growth can continue to pressure gold prices.

Rate Hike Expectations: Market Sentiment Shifts

According to the CME Fed Watch tool, the chances of a rate pause on the June 18th, 2025 meeting have increased to 91.70% from 82.70% a week ago.

Technical Analysis: Key Levels and Trading Strategy

Gold prices are holding  below  short term moving average 34 EMA and above 55 EMA and  above long-term moving averages (200 EMA) in the 4-hour chart. Immediate support is at $3130 and a break below this level will drag the yellow metal to $3100/$3000. The near-term resistance is at $3170 with potential price targets at $3200/$3265/3279/$3300/$3365/$3378/$3400/$3415/$3465/$3500.

It  is good to sell on rallies around $3170  with a stop-loss  at $3200 for a target price of $3005.