Gold prices experienced a downward correction towards $3,200 in early Monday trading, following a recent ascent to record highs. The US Dollar is exhibiting resilience amidst improved market sentiment and developments regarding US tariffs. The near-term trajectory of gold prices is anticipated to be influenced by Federal Reserve communications and forthcoming Chinese trade data.
The price of gold is currently declining, interrupting a three-day period of gains that culminated in a peak of $3,245 on Friday. This correction is attributed to an improvement in risk appetite, as evidenced by reduced safe-haven demand during Asian trading hours. Market participants are reacting favorably to Friday’s Wall Street recovery and positive news concerning US-China trade relations, which is currently easing upward pressure on gold.
Recent tariff announcements, including China’s response to US tariff increases and potential adjustments to US tariffs on Chinese semiconductors, are being interpreted positively by markets. This has contributed to a modest recovery in the US Dollar from multi-month lows. The combination of a stronger US Dollar and increased risk appetite is sustaining the corrective decline in gold prices. Market participants are now awaiting the release of China’s Trade Balance report and upcoming speeches from US Federal Reserve officials for further market direction.
