Gold ended higher on Friday with a 0.6% gain, but the momentum faded quickly as it slipped during Monday’s Asian session. The renewed optimism surrounding a potential U.S.-China trade agreement dampened demand for traditional safe-haven assets like gold.
According to a joint statement from Geneva, the U.S. and China have agreed to temporarily reduce tariffs on each other’s goods. This step aims to ease trade tensions and provides both sides a three-month window to work toward a more permanent resolution.
“The combined 145% U.S. levies on most Chinese imports will be reduced to 30%, including the rate tied to fentanyl, by May 14, while the 125% Chinese duties on U.S. goods will drop to 10%, according to the statement and officials in a briefing Monday. This, along with the Federal Reserve’s pause on rate cuts, assisted the U.S. Dollar to stand firm near a multi-week top, exerting pressure on the commodity,” shared Vijay Valecha, Chief Investment Officer, Century Financial.
On the geopolitical front, risks have shown tentative signs of easing. Russian President Vladimir Putin has agreed to hold direct talks with Ukrainian President Volodymyr Zelenskyy on May 15, without preconditions.
Meanwhile, Hamas announced plans to release Edan Alexander, the last known American hostage held in Gaza, and confirmed it will engage in direct discussions with the U.S. aimed at achieving a ceasefire and resuming humanitarian aid.
The spotlight shifts to upcoming U.S. inflation data and a key speech from Federal Reserve Chair Jerome Powell on Thursday. These events are likely to offer fresh insights into the Fed’s monetary policy path and could play a pivotal role in shaping gold’s trajectory in the near term.
Gold is trading below the 9 SMA on the daily chart. The yellow metal could test the psychological $3,200 level, followed by the $3,163 level on the 4-hour chart. Resistance can be seen at $3,300, and any recovery above this level can solidify bullish momentum.
Gold prices in the UAE are as follows –
24 Carat – AED395.25
22 Carat – AED366.00
21 Carat – AED350.75
18 Carat – AED300.75
