Euro Slides Below 1.1330 as Dollar Rallies on Solid U.S. Data and Hawkish Fed Bets

Economic

Summary:

The EUR/USD pair has come under renewed selling pressure, sliding toward 1.1285 as the US Dollar strengthens following upbeat ISM manufacturing data and persistent inflation fears.

SELL EURUSD

Close Time

CLOSED

1.12800

Entry Price

1.10000

1.14300

1.16619 +0.00193 +0.17%

27.3

Pips

Profit

1.10000

1.12527

Exit Price

1.12800

Entry Price

1.14300

The euro came under heavy selling pressure on Thursday, sliding decisively below the 1.1330 level and hitting session lows around 1.1285 during North American trade. The sharp drop in the EUR/USD exchange rate marks a critical technical and psychological shift, coming as the US dollar flexes its muscle once again supported by a surprisingly firm manufacturing sector and stubbornly persistent inflation in the United States. In contrast, the euro is facing growing headwinds amid dovish European Central Bank rhetoric and renewed fears of slowing inflation across the bloc.

The dollar’s rebound has been swift and forceful. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of major currencies, extended its recovery for the second consecutive session, punching through the crucial 100.00 mark a level often seen as a sentiment bellwether in currency markets. This resurgence followed the release of the April ISM Manufacturing PMI, which printed at 48.7, beating analysts' expectations of 48.0. Although the reading remained below the 50.0 threshold that demarcates contraction from expansion, the data was nonetheless taken as a signal of relative resilience, especially considering broader fears of economic softness.

More importantly for markets, inflationary pressure within the manufacturing sector remains elevated. The Prices Paid sub-index climbed to 69.8 from the previous 69.4, indicating that cost pressures on inputs are not easing, but rather intensifying. This uptick complicates the Federal Reserve’s path forward, as it suggests price growth is more entrenched than previously anticipated — a scenario that would likely delay any potential interest rate cuts and strengthen the dollar further in the process.

This follows Wednesday’s release of US GDP data, which revealed that the economy contracted by 0.3% on an annualized basis in the first quarter. It was the first time in three years that the US economy has posted a negative quarter. However, analysts from Morgan Stanley were quick to highlight that the contraction might not tell the full story. They argued that the dip in output was partially masked by inventory distortions, as American firms scrambled to frontload imports ahead of looming tariff hikes imposed by President Donald Trump. The full brunt of those protectionist measures, they warned, would likely manifest more clearly in the coming quarters, with possible ripple effects in hiring, inflation, and consumer spending.

Meanwhile, the geopolitical backdrop continues to offer little reassurance. Trade tensions between Washington and Beijing remain unresolved. In an interview with Fox News, US Trade Representative Jamieson Greer made it clear that no formal negotiations have resumed with China since the latest round of reciprocal tariffs. According to reporting by the South China Morning Post, Greer acknowledged that the current environment is one of “stalemate,” with no near-term dialogue planned an admission that immediately rekindled concerns over the global trade outlook and reinforced safe-haven demand for the dollar.

On the other side of the Atlantic, the euro has been weighed down by rising expectations that the European Central Bank will be the first major monetary authority to cut rates this year. A growing chorus of ECB officials has voiced concern about the downside risks to inflation, particularly as the continent struggles to digest the economic fallout from US trade policy. The ECB’s Deposit Facility rate, currently at 2.25%, is widely expected to be cut by 25 basis points at the central bank’s June meeting. Such a move would not only widen the policy divergence with the Federal Reserve but could also undermine the euro further, particularly if inflation data continues to trend lower.

Indeed, preliminary inflation figures for the Eurozone, set for release on Friday, are expected to confirm the ECB’s concerns. The Harmonized Index of Consumer Prices (HICP) for April is forecast to rise just 2.1% year-on-year, a modest slowdown from the 2.2% pace in March. At the core level — which strips out volatile items like energy, food, alcohol, and tobacco — price growth is seen ticking up slightly to 2.5% from 2.4%. However, national-level data suggests that the disinflationary trend is uneven. While Germany and France reported cooling inflation, Spain and Italy showed more stable price trends, highlighting the fragmented nature of price dynamics within the bloc.

To complicate matters further, recent GDP figures for the Eurozone offered a mixed picture. Eurostat reported that the region’s economy grew 0.4% in the first quarter — a stronger-than-expected print that doubled the growth rate recorded in the final quarter of 2024. Yet analysts caution that these numbers likely do not reflect the full impact of recently imposed US tariffs on European automobile exports, a key sector for the region. As these trade barriers filter through supply chains and corporate profit margins, the case for looser monetary policy in Europe may become more compelling.

From a market psychology standpoint, the current move in EUR/USD is not merely technical — it reflects an increasingly clear macro divergence between the US and Europe. The Federal Reserve, despite a brief pause in tightening, remains in a holding pattern due to sticky inflation, while the ECB appears poised to ease amid softer price pressures and external trade shocks. This policy bifurcation has reasserted itself in currency markets, and barring a dramatic shift in incoming data, it is likely to persist.

Technical Analysis

Technically, the EUR/USD pair has breached key support levels, and the recent drop has been exacerbated by a classic head-and-shoulders pattern breakdown on the short-term charts. The neckline breach reinforced bearish sentiment, and while intraday price action attempted a modest rebound, these efforts have so far failed to reclaim meaningful ground. Momentum indicators such as the Relative Strength Index (RSI) have begun to emerge from oversold territory, suggesting the potential for minor recoveries, but the broader trend remains firmly tilted to the downside.

Unless buyers manage to decisively retake the 1.1360–1.1390 resistance zone, the euro remains vulnerable to further losses. A drop toward the next support level at 1.1260 appears likely, and if that fails to hold, markets may begin to price in a test of the psychologically important 1.1000 level.

TRADE RECOMMENDATION

SELL EURUSD

ENTRY PRICE: 1.1280

STOP LOSS: 1.1430

TAKE PROFIT: 1.1000

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

Gold prices have weakened amid easing trade tensions and declining safe-haven demand.

BUY XAUUSD

Close Time

CLOSED

3225.72

Entry Price

3306.00

3159.00

4216.92 +19.01 +0.45%

10.8

Pips

Profit

3159.00

3226.80

Exit Price

3225.72

Entry Price

3306.00

Fundamentals

On Gold futures have experienced a sharp sell-off, driven by the easing of trade tensions and the subsequent decline in safe-haven demand. The strengthening US dollar has further dampened enthusiasm for gold as a safe-haven asset, while also rendering dollar-denominated commodities more expensive for international buyers.

The increasing likelihood of a US trade agreement has bolstered market optimism and risk appetite. However, further downside potential may be limited, as expectations for interest rate cuts have risen following a series of lackluster US economic data releases. The US economy contracted by 0.3% in the first quarter. Lower interest rates typically enhance the appeal of non-yielding gold.

Market Poised for a Brief Oversold Rebound _1

Technical Analysis

During the Asian session on Thursday, gold prices breached the key support level at $3,259, generating a strong bearish signal. This development propelled new short positions into the demand zone near $3,211, exacerbating the short-term negative outlook.

On the same chart, a breakdown of a key contracting triangle has accelerated this process. The daily structure's momentum has plunged sharply, approaching the centerline support, thereby corroborating this bearish action.

A firm breakdown below the $3,211 level would further undermine the near-term structure and expose the $3,200 psychological level, as well as the 61.8% Fibonacci retracement target at $3,164. However, considering the monthly candlestick performance for April, which featured a long upper shadow, the market may form a short-term rebound signal.

On the upside, immediate resistance is situated near $3,259, with further resistance at $3,288, followed by the starting point of yesterday's plunge at $3,311.

On the downside, initial support is near $3,211, followed by the $3,200 psychological level; the next major support zone lies between $3,194 and $3,186. A breakdown below this range would target the more pessimistic outlook in the $3,120 range.

Overall Assessment,Following the significant decline in gold prices, the market is currently in an oversold condition. Ahead of the release of major data (the April non-farm payrolls report), the anticipated economic slowdown may provide a floor of support for this asset.

Trading Recommendations

Trading Direction: Long

Entry Price: 3211

Target Price: 3306

Stop Loss: 3159

Valid Until: May 16, 2025, 23:55:00

Support: 3211/3193/3186

Resistance: 3243/3259/3386

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

The Bank of Japan (BoJ) maintained its interest rates unchanged on Thursday and adopted a more cautious stance on further rate hikes, downgrading its growth and inflation forecasts. This is expected to curb the yen's strength.

BUY USDJPY

Close Time

CLOSED

144.905

Entry Price

149.110

141.300

155.188 -0.157 -0.10%

84.1

Pips

Profit

141.300

145.746

Exit Price

144.905

Entry Price

149.110

Fundamentals

The BoJ unanimously voted to keep the benchmark interest rate at 0.50%, in line with expectations. However, the central bank significantly downgraded its economic growth forecasts, expressing a cautious outlook on the economic outlook.

The BoJ now forecasts that Japan's real GDP growth rate will be only 0.5% in FY2025, down from the January forecast of 1.1%. For FY2026, it is projected to be 0.7% (previously forecast at 1.0%). Assuming a stable global economic situation, the central bank expects Japan's real GDP growth rate to rebound to 1.0% in FY2027.

In its statement, the BoJ acknowledged that "Japan's economic growth may slow down" due to the pressure on external demand and corporate profitability from global trade and policy uncertainties. However, the central bank expects that once overseas economies return to a "moderate growth path," Japan's economic activity will accelerate again.

Market Observations: Despite the BoJ's repeated optimistic signals over the past year that the economy is improving, the actual data does not support this claim. This time, the central bank downgraded its GDP and inflation forecasts and pointed out that downside risks still exist. The shift in this policy tone is particularly noteworthy.

However, this does not mean that the BoJ has ended its rate hike cycle. Core inflation remains sticky. Had it not been for the current high uncertainty in international trade, the central bank might have already raised rates again. As for the timing of the next rate hike, it is hard to determine.

If the yen depreciates, inflation rises, or wage growth shows significant improvement, a rate hike is still possible within the year. Otherwise, it is more likely that the rate hike will be postponed to next year or even the year after. It will depend on the development of the global trade war.

BoJ Rate Hike Debate Shifts from "When" to "If"_1

Technical Analysis

After the BoJ maintained policy stability and sent dovish signals, USDJPY surged. However, despite the recent position risks, the yen is expected to face more uncertainty due to the continued presence of safe-haven demand and domestic capital inflows.

USDJPY broke through 144.05 today, extending its short-term rebound from the bottom of 139.87. The trend has returned to an upward trend, targeting 146.11. However, as long as USDJPY can hold above the 38.2% Fibonacci retracement level of 158.86 to 139.87 (147.12), the medium- and short-term outlook will remain bearish.

On the downside, if the price can stabilize above 141.96, it would indicate that the rebound is complete and forms a corrective move. In this case, USDJPY is likely to retest 139.87 next.

Trading Recommendations

Trading Direction: Long

Entry Price: 143.25

Target Price: 149.11

Stop Loss: 141.30

Valid Until: May 16, 2025, 23:55:00

Support: 144.05/143.03/141.90

Resistance: 145.83/146.11/148.27

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Japanese Yen weakened sharply after the Bank of Japan kept rates unchanged and signaled no rush to tighten further, pushing USD/JPY to near three-week highs

BUY USDJPY

Close Time

CLOSED

143.999

Entry Price

149.000

142.000

155.188 -0.157 -0.10%

72.4

Pips

Profit

142.000

144.723

Exit Price

143.999

Entry Price

149.000

The Japanese Yen weakened broadly on Thursday, sending the USD/JPY pair soaring nearly 0.8% to touch a fresh three-week high around 144.80 during the European session. The move came in response to the Bank of Japan’s (BoJ) latest policy decision, which left interest rates unchanged at 0.5% and struck a notably dovish tone regarding the pace of future rate hikes. As the BoJ doubled down on its cautious stance, the Yen fell out of favor, allowing the U.S. Dollar to capitalize on policy divergence despite softening ahead of key American manufacturing data.

At the heart of the Yen’s slump is the BoJ's continued reluctance to tighten monetary policy aggressively—an approach that increasingly isolates it from global peers, particularly the U.S. Federal Reserve. While the Fed continues to signal higher-for-longer rates amid sticky inflation, the BoJ appears more concerned about preserving economic stability than curbing inflation swiftly.

In a widely anticipated move, the BoJ opted to maintain its short-term policy interest rate at 0.5% during its April meeting. However, what rattled markets more was the central bank’s downward revision of its GDP growth forecast for the fiscal year ending March 2026—from a previous 1.1% to just 0.5%. The downgrade reflects heightened concern about economic headwinds, including the lingering impact of global trade tensions and a weakening domestic growth trajectory.

“We will enter a period in which both inflation and wage growth will likely slow somewhat,” BoJ Governor Kazuo Ueda said in a post-meeting press conference, as reported by Reuters. “But we expect a positive cycle of rising wages and inflation to continue due to a severe labour shortage.” Ueda’s comments underscore the central bank’s preference for a wait-and-see approach, relying on structural labor tightness rather than policy levers to stimulate inflation.

Notably, the BoJ also cited potential risks from additional U.S. tariffs, referring to measures introduced by President Donald Trump on April 2 that could weigh on Japan’s trade sector. The central bank’s tone suggests that it is increasingly wary of geopolitical and external shocks, further reducing the likelihood of imminent rate hikes.

The policy divergence between Tokyo and Washington continues to be the primary narrative driving USD/JPY higher. While the BoJ is scaling back its growth projections and emphasizing patience, the Federal Reserve is grappling with inflation that remains above its 2% target. Although the U.S. Dollar gave up some of its earlier gains ahead of the final S&P Global Manufacturing PMI data due later today, the broader trend remains supportive of further USD/JPY upside.

The greenback’s slight retreat appears to be a case of market consolidation rather than a reversal, as traders brace for fresh macroeconomic clues from the U.S. The April manufacturing PMI data will offer insight into whether America’s industrial activity is regaining momentum or slipping under the weight of high borrowing costs. Stronger-than-expected data could reinvigorate expectations for another Fed rate hike or delay in the timing of potential cuts, reinforcing USD strength.

Technical Analysis

From a technical perspective, the USD/JPY pair remains firmly within a bullish corrective trend. Price action continues to hover above the 50-period Exponential Moving Average (EMA50), a sign of sustained upward momentum in the short term. The current rally appears resilient, bolstered by persistent buying interest and the pair's position above a crucial psychological support level at 144.00.

However, a note of caution arises from the Relative Strength Index (RSI), which is flashing early signs of overbought conditions. The RSI has edged into elevated territory, typically associated with potential fatigue in a rally. While this doesn’t necessarily indicate an imminent reversal, it could limit upside potential in the very near term.

Still, as long as the pair remains above the 144.00 threshold, the bullish outlook stays intact. The next key resistance level to watch is around 149.00—a level that, if breached, could pave the way for a return to the multi-decade highs last seen in late 2023.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 144.00

STOP LOSS: 142.00

TAKE PROFIT: 149.00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

Price action on the daily chart has confirmed rejection from this area, with a series of bearish candlesticks hinting at a potential reversal.

SELL GBPUSD

Close Time

CLOSED

1.33192

Entry Price

1.28680

1.35200

1.33315 +0.00003 +0.00%

45.3

Pips

Profit

1.28680

1.32739

Exit Price

1.33192

Entry Price

1.35200

Economic data released by the U.S. Department of Commerce on Thursday revealed that the American economy unexpectedly contracted at an annualized rate of 0.3% during the first quarter of 2025. This disappointing result fell short of market expectations for a 0.4% increase and marked a sharp slowdown from the previous quarter’s 2.4% expansion. The weaker growth print arrives at a time of mounting uncertainty surrounding the direction of U.S. trade policy under President Donald Trump.

Speaking on Wednesday, Trump acknowledged that the economic impact of current policies may take time to materialize. He also deflected blame for the stock market's recent performance, pointing fingers at former President Joe Biden. The comments came just days before several high-impact data releases, including the latest U.S. jobless claims, final S&P Global manufacturing PMI, and the ISM Manufacturing Index—all set to be released later Thursday.

However, investor attention remains firmly fixed on Friday’s Nonfarm Payrolls (NFP) report, where consensus forecasts suggest the U.S. economy likely added 130,000 jobs in April. The labor market data could provide further clues about the underlying health of the economy and shape expectations for future monetary policy moves.

Speaking at the “Investing in America” event at the White House, President Trump also took aim at the Federal Reserve, expressing frustration with the current level of interest rates. He hinted at dissatisfaction with at least one Fed official—without naming names—and reiterated his belief that rates should be lower. “I understand interest much better than Powell,” Trump claimed, while also threatening pharmaceutical companies with future tariff barriers if they do not meet certain conditions.

Meanwhile, fresh data from the Bureau of Economic Analysis (BEA) indicated that the Fed’s preferred inflation gauge—the Core Personal Consumption Expenditures (Core PCE) Index—rose by 2.6% year-over-year in March, in line with expectations but down from February’s 3% increase.

Labor market signals were also weaker than expected, as ADP’s National Employment Report showed that private sector employers added only 62,000 jobs in April, significantly below both the forecast of 115,000 and the prior month’s figure of 147,000.

Across the Atlantic, Bank of England (BoE) Governor Andrew Bailey last week highlighted the potential economic risks posed by global trade tensions. Speaking on the sidelines of the International Monetary Fund’s (IMF) Spring Meetings in Washington, Bailey urged policymakers to take the threat to global growth seriously. “We must consider the risk of a trade war very carefully,” he warned.

This week, the UK economic calendar is notably quiet, leaving the British pound more exposed to global sentiment and external developments. The sterling has remained relatively supported against the U.S. dollar amid heightened uncertainty surrounding the ongoing U.S.–China trade conflict. The United States has expressed a desire for China to return to the negotiating table, citing the imbalance in bilateral trade. “It’s really up to China to de-escalate—they sell us five times more than we sell them,” said Bessent in a CNBC Squawk Box interview on Monday. Double Top Formation Signals Potential Bearish Shift in GBPUSD_1

Double Top Formation Signals Potential Bearish Shift in GBPUSD_1

Technical Analysis

The GBP/USD pair has encountered significant resistance near the 1.3431 level, marking a retest of a previous high and forming what now appears to be a textbook double top pattern—a bearish formation. Price action on the daily chart has confirmed rejection from this area, with a series of bearish candlesticks hinting at a potential reversal. The pair has since entered a phase of consolidation, but failure to break above this resistance suggests the next directional move could be downward.

A deeper decline could target the next key support zone around 1.2868. Notably, this level is reinforced by the 100- and 200-period moving averages, currently aligned at 1.27226 and 1.28437, respectively. These moving averages often act as natural magnets for price, reinforcing the likelihood of further downside movement in the near term.

However, should bullish momentum regain control and price breaks decisively above 1.3431, the next upside objective would likely be the psychological resistance at 1.3500—a level that could attract fresh buying interest and potentially signal the continuation of the broader uptrend.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3320

Target price: 1.2868

Stop loss: 1.3520

Validity: May 09, 2025 15:00:00

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This area has served as a strong floor in recent sessions, with repeated bullish bounces suggesting buyers may be preparing to reassert control.

BUY EURJPY

Close Time

CLOSED

162.016

Entry Price

163.160

161.500

180.983 +0.110 +0.06%

77.9

Pips

Profit

161.500

162.795

Exit Price

162.016

Entry Price

163.160

Expectations of further monetary easing in the eurozone are gaining traction, as European Central Bank (ECB) officials continue to flag concerns over subdued inflation and rising external risks. On Monday, ECB policymaker and Finnish central bank governor Olli Rehn underscored the threat of inflation remaining anchored below the ECB’s 2% target, particularly amid renewed trade tensions tied to U.S. tariff policies. Rehn stressed the importance of maintaining policy flexibility, even going so far as to suggest that interest rate cuts below the neutral level should not be ruled out in the coming months.

Echoing this sentiment, François Villeroy de Galhau, Governor of the Bank of France and fellow ECB member, reiterated his support for additional rate cuts. He voiced confidence that inflation will gradually return to target, but warned that escalating protectionist trade measures—especially those driven by U.S. policy—pose a serious threat to the eurozone’s fragile recovery and could dampen business confidence and economic growth.

Against this backdrop, markets are now almost fully pricing in a 25-basis-point rate cut at the ECB’s June policy meeting. ECB officials have already flagged expectations of further moderation in both inflation and economic activity, fueled in part by the impact of U.S. tariffs on key European trade partners.

Meanwhile, attention shifts to Japan, where the Bank of Japan (BoJ) is set to announce its monetary policy decision on Thursday following a two-day meeting. Market participants broadly anticipate that the BoJ will leave its benchmark interest rate unchanged at 0.50%—its highest level in 17 years. The central bank last raised rates by 25 basis points in January as inflation approached its 2% target, but it opted to hold steady in March.

In its previous forecast, the BoJ projected GDP growth of 1.1% for fiscal year 2025 and 1.0% for fiscal 2026. However, these forecasts may come under pressure as Japan—an export-driven economy—grapples with ongoing trade tensions. The bank also expected consumer inflation to average 2.4% and 2.0% over the same periods, respectively. Yet with no breakthrough in trade negotiations, the risks of declining exports, weakened capital investment, and rising import-driven inflation are increasing.

Given these uncertainties, BoJ policymakers are expected to keep interest rates on hold until clearer economic signals emerge. In anticipation of possible shocks from U.S. trade actions, Japanese Prime Minister Shigeru Ishiba announced a set of emergency economic measures in mid-April, aimed at cushioning the impact on vulnerable industries and households. Bulls Could Regain Momentum From Local EURJPY Support_1

Bulls Could Regain Momentum From Local EURJPY Support_1

Technical Analysis

The EUR/JPY pair is currently testing a key support zone near 161.96, with local lows recorded at 161.71. This area has served as a strong floor in recent sessions, with repeated bullish bounces suggesting buyers may be preparing to reassert control. Should the pair fail to post a lower low, it may trigger upward pressure, especially if resistance around the descending trendline and the 100-period moving average near 162.46 is breached.

A successful break above this confluence zone could pave the way for a corrective move toward 163.16. However, the Relative Strength Index (RSI) is hovering near 44, still within neutral territory. This indicates that oversold conditions have yet to be reached, and additional downside pressure cannot be fully ruled out. Should bearish momentum resume, the next key support lies at 161.24—a level that may prove pivotal in the near term.

Trading Recommendations

Trading direction: Buy

Entry price: 161.98

Target price: 163.16

Stop loss: 161.50

Validity: May 09, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

According to the World Gold Council, escalating global trade tensions spurred a significant influx of investment into gold ETFs during the first quarter, thereby driving a 19% increase in gold prices within a three-month period.

SELL XAUUSD

Close Time

CLOSED

3302.51

Entry Price

3232.00

3350.00

4216.92 +19.01 +0.45%

705.1

Pips

Profit

3232.00

3231.88

Exit Price

3302.51

Entry Price

3350.00

Fundamentals

The World Gold Council (WGC) reported on Wednesday that global gold demand (including over-the-counter transactions) increased by 1% year-over-year to 1,206 metric tons in the first quarter of 2025, the highest quarterly level since 2016.

A significant rebound in gold ETF inflows drove total investment demand to 552 tons, a 170% increase year-over-year, the highest since Q1 2022. Demand for gold bars and coins remained robust at 325 tons, 15% above the five-year quarterly average. Global gold jewelry demand, a primary component of physical demand, decreased by 21% to 380.3 tons, the lowest level since the onset of the COVID-19 pandemic in 2020.

Central bank purchases, another key driver of gold demand, decreased by 21% to 243.7 tons in the first quarter.

Regarding key consumer markets, the Chinese market witnessed a surge in gold ETF demand, with inflows reaching a record high of approximately RMB 16.7 billion (equivalent to US$2.3 billion, or 23 metric tons) during the first quarter. This unprecedented influx, coupled with soaring gold prices, propelled the total assets under management (AUM) and total holdings of gold ETFs to new historical peaks, reaching RMB 101 billion (approximately US$13.9 billion) and 138 metric tons, respectively.

According to statistical data, the total consumer demand for gold in the Chinese market, encompassing gold bars, coins, and jewelry, amounted to 249 metric tons in Q1, reflecting a 15% year-over-year decrease, primarily due to subdued demand for gold jewelry.

A Fierce Battle for the Monthly Close Begins, with Heightened Volatility Expected_1

Technical Analysis

Gold prices extended their decline for a second consecutive day, retesting the critical US$3,259 level before finding temporary support. Risk sentiment has waned once more, as indications mount that the U.S.-China trade dispute is de-escalating (a bearish signal for gold).

However, the broader outlook remains uncertain, with investors still wary of the lingering negative effects of global tariffs, which continue to fuel safe-haven demand. This dynamic suggests that gold prices may experience significant volatility in the long term.

The bearish catalysts for gold persist, with the 20-day SMA at US$3,259 serving as the primary support level. A breach of this level could see bears targeting the demand zone at US$3,247, with the 5-week SMA at US$3,232 as the subsequent support to monitor.

Given that today marks the end of the month, with a fierce battle for the monthly close underway, a strategy of range-bound trading around key support levels is recommended.