Gold () remains under pressure on Monday, struggling to hold onto its modest rebound from a more than one-week low. The metal is hovering around the $3,340–$3,335 per ounce region during early European trading hours. Despite attempts at recovery, the ongoing strength of the US Dollar, now rising for a third consecutive session, is significantly capping gold’s upside momentum.
Adding to the headwinds is the prevailing risk-on sentiment, driven by news of a fresh trade agreement between the United States and the European Union. The development has curbed safe-haven flows and bolstered appetite for yield-bearing assets, further limiting gold’s appeal.
Market Snapshot: Gold Faces Pressure from a Firming Dollar and Easing Trade Concerns
US President Donald Trump and European Commission President Ursula von der Leyen announced a comprehensive trade deal over the weekend, imposing a 15% tariff on most EU exports to the U.S. This announcement, coupled with recent agreements with Japan and renewed U.S.-China trade talks, has fueled market optimism and diminished the demand for traditional safe-haven assets like gold.
On the flip side, internal political pressures on the continue to cloud the ’s outlook. Key figures such as Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman, both aligned with the Trump administration, have called for an immediate rate cut at Wednesday’s FOMC meeting.
Trump has also renewed his direct criticism of Fed Chair Jerome Powell, raising market concerns about the central bank’s political independence. Against this backdrop, investors appear hesitant to take aggressive directional bets ahead of the highly anticipated policy announcement and Powell’s press conference.
Technical Outlook: Gold Vulnerable After Breaking Ascending Channel Support
From a technical perspective, Friday’s downside break of the short-term ascending channel and the 50% Fibonacci retracement level of the June rally marks a significant bearish signal. Daily momentum indicators have turned negative, increasing the likelihood of further declines toward the $3,300 level, and potentially a retest of the monthly low near $3,283–$3,282.
That said, gold showed modest resilience around the $3,311–$3,312 zone, attempting to stabilize in early-week trade. On the upside, the 200-period Simple Moving Average (SMA) on the 4-hour chart offers immediate resistance around $3,351–$3,352. A decisive break above this area could trigger short-covering, lifting prices toward the $3,371–$3,373 supply zone, followed by $3,400 and the major resistance at $3,438–$3,440.
What’s on the Radar This Week?
Investor focus remains firmly on Wednesday’s , the accompanying policy statement, and Jerome Powell’s press briefing. Markets are keen to see whether the Fed will bow to political pressure and start easing, or maintain its current stance amid still-resilient economic data.
Key US macroeconomic releases throughout the week, including Durable Goods Orders, will also be closely watched for their impact on the Dollar’s trajectory and gold’s next move.
Conclusion
Gold finds itself in a precarious position, caught between bearish pressures from a surging Dollar and upbeat trade sentiment, and the potential for support from a dovish Fed surprise. In this uncertain landscape, gold remains highly sensitive to any political or economic developments in the days ahead.