Gold Price Retreats from Monthly High as Dollar Rebounds and Risk Sentiment Improves

Gold Price Pulls Back from Monthly High amid Trade Optimism and Modest USD Recovery

Gold price (XAU/USD) retreats after reaching its highest level since June 16, peaking near the $3,439 mark during Wednesday’s Asian session. The pullback ends a three-day winning streak, as risk appetite improves following the announcement of a significant trade deal between the United States and Japan by President Donald Trump. The renewed risk-on mood weighs on the safe-haven appeal of gold and triggers profit-taking, further pressured by a modest rebound in the US Dollar (USD).

While the greenback gains some ground from a two-week low, the move lacks conviction due to ongoing uncertainty surrounding the Federal Reserve’s interest rate policy. The unclear timing and pace of potential rate cuts are keeping USD bulls cautious, which in turn provides a degree of support for the non-yielding yellow metal and helps limit deeper losses. Given the fragile backdrop, traders are likely to wait for a decisive break below support levels before confirming a near-term top in gold and betting on a deeper correction.

Market Movers Daily Digest: Trade Deal Dampens Safe-Haven Demand, USD Rebounds Slightly

• President Trump’s social media announcement of a comprehensive trade agreement with Japan has bolstered global market sentiment. The deal includes reciprocal 15% tariffs and greater access to the Japanese market for U.S. products such as automobiles, trucks, rice, and other agricultural goods. This positive development has fueled a fresh wave of risk-on trading and reduced demand for traditional safe-haven assets like gold.
• In parallel, a slight recovery in the US Dollar has drawn some capital away from gold. However, USD upside remains limited as political pressure mounts on the Fed. Trump continues to advocate for lower interest rates and has publicly called for the resignation of Fed Chair Jerome Powell. Additionally, Treasury Secretary Scott Bessent has reignited concerns about central bank independence by urging a comprehensive internal review of the Fed’s operations.
• These uncertainties are preventing USD bulls from making aggressive moves and may continue to support gold in the near term. Broader concerns over global tariff policy remain a key factor, potentially acting as a tailwind for gold and capping any significant downside.
• Looking ahead, traders will focus on upcoming US Existing Home Sales data for fresh intraday direction. More importantly, attention will be centered on the global flash PMIs, which could shift risk sentiment and drive the next leg in gold price movement.

Gold Price Technical Outlook: Dip-Buyers Likely to Step In Near $3,400 as Bullish Setup Remains Intact

Gold price (XAU/USD) is expected to attract buying interest on dips near the $3,400 level, supported by a favorable technical backdrop. Earlier this week, the metal broke above the key horizontal resistance zone at $3,368–$3,370 and extended its rally past the $3,400 psychological mark on Tuesday—an encouraging signal for bulls.

Technical indicators on the daily chart remain firmly in positive territory and are still far from overbought levels, suggesting room for further upside. As such, any pullback toward the $3,400 level is likely to be viewed as a buying opportunity. However, if gold sees stronger follow-through selling, the price could slip back toward the $3,370 zone, which now serves as a support level after the breakout.

On the upside, immediate resistance is now seen near the session high of $3,438–$3,439. A clear break above this region would expose the July swing high at $3,451–$3,452. Sustained strength beyond that could open the door for a retest of the all-time high near the $3,500 psychological level, last reached in April.