Gold reversed Thursday’s gains and fell toward $3,260 per troy ounce at the end of the week in response to continued improvement in market sentiment, which was bolstered by prospects for good developments in the US-China trade conflict.
The overheated Gold rally appears to be in need of more cooling. Traders appear to be buying into speculations that a trade deal between the United States and China is imminent, despite China refuting those rumors. The risk here could be that markets are misinterpreting the US terminology on whether they are “talking” or “negotiating” and that no agreement is done anytime soon, possibly with a revisit to $3,500.
Looking at technical levels, the daily Pivot Point of $3,335 is the first upside and intraday level that must be recaptured. The R1 intraday resistance witnessed a tiny test in the very early opening on Friday, coming in at $3,381. Further up, gold prices could extend their recovery to the R2 resistance at $3,414, surpassing the $3,400 level.
On the downside, the S1 support momentarily broke this morning, but price movement has already reversed back above it, at $3,302. Further down, the S2 support at $3,256 comes before the technical crucial floor at $3,245 (April 11 peak).
Fundamental Overview
Bloomberg reported that China is considering exempting some US imports from tariffs as costs spiral out of control, causing market volatility. At the same time, Bloomberg reported that the country is developing emergency measures to deal with foreign shocks using new financial and policy instruments.
The gold market in China is a daily market mover.
Bloomberg reports that the Swiss National Bank (SNB) made 6.7 billion Swiss Francs (CHF) from its gold holdings in the first quarter of 2025. This made Kenya’s central bank think about adding gold to its reserves to balance its foreign exchange holdings beyond the dollar and other currencies.
According to Reuters, Gold’s record-breaking surge and significant intraday fluctuations created ripples in China, driving retail demand, sparking abnormal trading activity on the Shanghai exchange, and prompting official alerts.
Bloomberg reports US Treasury Secretary Scott Bessent saying the US and South Korea might reach a “agreement of understanding” on trade as early as next week. Increasingly, headlines about possible trade deals should push gold down.
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