Gold Comes Under Pressure – But Holds Key Support

Gold Comes Under Pressure – But Holds Key Support

Gold was under massive selling pressure yesterday. The price briefly fell by more than $100 and is currently trading around $3,250. As a result, the precious metal was clearly one of the losers in the market. However, there are also positive signals: the key support around $3,200 – the low from May 1st – has been defended so far. This is a good sign for the bulls.

The main reason for the decline seems to be the geopolitical easing between the US and China. Many market participants had expected further escalation in the trade conflict – but this expectation has not yet been fulfilled. As a result, gold is losing its appeal as a safe haven.

From a technical perspective, the area around $3,200 is now crucial. If this level holds, and if Donald Trump adopts a more moderate tone in relation to trade talks, the market could indeed dip below this support.

Gold has increasingly become a barometer for the state of global trade in recent months. It reacts sensitively to any change in the "trade war on/off" rhetoric. So, if real progress is made on tariffs, it is likely to be negative for gold in the short term.

Nevertheless, it is worth taking a look at the bigger picture: Gold has recently surged from $2,500 to $3,500 nearly without any major corrections. Now we are seeing a sideways consolidation in a $300 range at high levels – and that’s actually the best thing bulls could hope for. Sure, talking about $4,000 or $10,000 is nice – but if gold can hold stable above $3,200 in the coming weeks, it would be a strong signal for long-term strength.

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