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Gold price drops sharply toward $3,300 amid broad US Dollar strength.
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The Greenback holds firm ahead of the July 9 U.S. tariff deadline.
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Stronger-than-expected June NFP data leads traders to scale back Fed rate-cut expectations.
Gold (XAU/USD) fell nearly 0.8% during Monday’s European session, dropping close to $3,300 as mounting selling pressure weighed on the yellow metal. The decline comes amid increased demand for the US Dollar (USD) as global market sentiment turns risk-averse. Investors are flocking to the Greenback as a safe-haven, ahead of the July 9 tariff deadline, pushing the US Dollar Index (DXY) back toward weekly highs near 97.45.
The risk-off tone in markets is fueled by uncertainty around the upcoming US tariff measures. While the United States has already inked trade deals with the UK, Vietnam, and a limited agreement with China, investors remain cautious. President Donald Trump recently announced plans to send formal letters outlining tariff rates to countries that have not yet engaged in trade talks during the 30-day tariff pause, heightening trade-related anxiety.
Despite the geopolitical uncertainty, gold — traditionally another safe-haven asset — failed to attract strong buying interest. This is largely due to fading expectations of a dovish Federal Reserve. Traders have scaled back bets on a rate cut in the upcoming policy meeting after June’s Nonfarm Payrolls (NFP) data came in stronger than anticipated. Rising US interest rates reduce the appeal of non-yielding assets like gold.
Technical Outlook:
From a technical perspective, gold is hovering near the ascending trendline of an Ascending Triangle pattern on the daily chart, formed from the April 7 low of $2,957. The horizontal resistance of the pattern is aligned with the April 22 peak around $3,500. A breakdown below the trendline could lead to accelerated losses.
Gold is currently trading below the 20-day Exponential Moving Average (EMA) at $3,334, reflecting short-term uncertainty. The 14-day Relative Strength Index (RSI) remains within the 40–60 range, signaling a sideways momentum.
Key Levels to Watch:
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Resistance: A breakout above $3,500 could open the door to further gains toward $3,550 and $3,600.
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Support: On the downside, a breach below the May 29 low of $3,245 may lead to a decline toward $3,200 and potentially the May 15 bottom at $3,121.
Overall, gold remains vulnerable to further losses unless it finds support near key technical levels and macroeconomic sentiment shifts in its favor.
Gold daily chart
