Gold declines as EU strikes trade deal

Gold held steady at $3,330 per troy ounce on Monday following three consecutive days of declines. The metal faced downward pressure after news emerged of a trade agreement between the US and the EU, dampening investor interest in safe-haven assets.

On Sunday, the US and EU reached a broad trade deal, which includes a 15% tariff on most European goods, alongside commitments to invest hundreds of billions of dollars in American industry. This agreement mirrors last week’s US–Japan trade pact in structure.

Traders are now bracing for a busy week of economic events, with the Federal Reserve meeting at the centre of attention. While interest rates are expected to remain unchanged, markets will scrutinise any signals about a potential rate cut in September.

Key US labour market data will also be in focus, including JOLTS reports, ADP employment figures, and the crucial nonfarm payrolls release. Equally significant will be the PCE price index – the Fed’s preferred inflation gauge – which will indicate whether price pressures are intensifying amid new tariffs.

Technical analysis: XAU/USD

Four-hour chart

The H4 chart shows XAU/USD forming a broad consolidation range around 3,375. After breaking downward today, the market reached its local downside target at 3,318. Following this, we anticipate a possible upward correction towards 3,375 (testing from below), before a renewed decline towards 3,312. This scenario is supported by the MACD indicator, with its signal line below zero and pointing sharply downward.

One-hour chart

On the H1 chart, the market has achieved its local decline target at 3,318. Currently, an upward impulse is forming towards 3,349. A consolidation range near 3,346 may develop, with an upside breakout potentially extending gains to 3,375. Thereafter, a new downward wave towards 3,312 could emerge. The Stochastic oscillator aligns with this outlook, as its signal line is above 50 and rising sharply towards 80.

Conclusion

Gold remains under pressure amid shifting global trade dynamics, with technical indicators suggesting further volatility ahead. Traders should monitor key US data releases and signals from the Fed for directional cues.