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Gold prices rebounded after a sluggish start to the week, trading securely above $3,300 in the American session on Monday. Investors are closely watching developments in the US-China trade negotiations taking place in London.
Technical Outlook
Gold has shown resilience, managing to recover from an intraday low just below $3,300. However, the precious metal faces stiff resistance at $3,352-$3,353. A break above this zone could drive prices toward the $3,377-$3,378 area, with a potential extension to $3,400 and possibly the $3,425-$3,430 range. Conversely, a move below $3,283-$3,282 would open the door to the $3,246-$3,245 zone and further towards $3,200.
Fundamental Landscape
The upcoming US-China trade talks are at the forefront of market attention. The negotiations are expected to influence risk sentiment and potentially boost safe-haven demand for gold. Meanwhile, Friday’s Nonfarm Payrolls report showed a stronger-than-expected 139K job gain in May, which has led to a reduction in bets for immediate rate cuts by the Federal Reserve.
Despite higher Treasury yields and a stable unemployment rate of 4.2%, gold continues to find support from safe-haven flows. Heightened geopolitical risks, particularly related to the Russia-Ukraine conflict and concerns about US fiscal health, have bolstered demand for gold as a hedge.
President Trump has reiterated his calls for significant interest rate cuts, putting added pressure on the Fed. While the central bank’s stance remains data-dependent, markets are still pricing in a potential cut in September.
US and Chinese officials are meeting in London to attempt to resolve the ongoing trade dispute. Any positive signals from these talks could drive further market optimism, though gold’s safe-haven status is likely to remain in play as uncertainty persists.
