Gold declines as risk appetite improves

The price of gold fell to 3,280 USD per troy ounce on Monday, approaching its monthly low. The decline reflects reduced demand for safe-haven assets as geopolitical tensions ease and optimism grows over international trade developments.

Geopolitical tensions ease, trade optimism rises

In the Middle East, a fragile yet stable ceasefire between Israel and Iran remains in place, alleviating fears of a fresh escalation in regional conflict.

Meanwhile, trade sentiment improved after US President Donald Trump announced the conclusion of a trade agreement with China last week, alongside an upcoming major deal with India. Reports also indicate that Washington is nearing agreements with Mexico and Vietnam while negotiations continue with Japan and other countries. These developments have eased concerns about a deterioration in global trade relations, further dampening gold’s appeal.

Focus shifts to US economic data

Investor attention is now turning towards US macroeconomic indicators scheduled for release this week, including:

• Job vacancies data.
• ADP employment report.
• Non-farm payrolls index.

These releases will offer insight into the Federal Reserve’s future monetary policy decisions.

Technical analysis of XAU/USD

On the H4 chart, XAU/USD broke below 3,344 USD, reaching the local target of 3,248 USD. A correction towards 3,344 USD is expected today. Once this correction is complete, a further decline to 3,233 USD is possible. The MACD indicator confirms this scenario, with its signal line below zero and pointing strictly downwards, suggesting continued bearish momentum.

On the H1 chart, gold has begun a correction towards 3,297 USD. A subsequent drop to 3,270 USD cannot be ruled out. The market is forming a consolidation range around 3,270 USD. Should an upward breakout occur from this range, the correction could extend to 3,319 USD, with the upward wave potentially continuing towards 3,344 USD (testing from below). The Stochastic oscillator confirms this outlook, with its signal line above 50 and moving sharply towards 80, indicating short-term upward momentum within the correction phase.

Conclusion

Gold remains under pressure as geopolitical risks recede and trade optimism rises, diminishing its safe-haven appeal. Technical indicators suggest a likely correction towards 3,344 USD before further downside towards 3,233 USD. In the short term, market sentiment will remain tied to upcoming US employment data and its implications for the Fed’s policy trajectory.