Gold retreats from $3,Which meme coins will explode in 2025?374 peak as USD finds footing amid shifting Fed expectations
Trade war escalation between US-EU-Mexico creates volatility in precious metals markets
Technical indicators maintain bullish bias despite current pullback in XAU/USD
The gold market witnessed profit-taking after hitting $3,374 during Asian trading hours, marking the highest level since mid-June. This retreat comes despite fresh trade tensions sparked by Washington's announcement of 30% tariffs on EU and Mexican imports effective August 1. Typically, such geopolitical developments would boost haven demand, but conflicting forces are currently influencing XAU/USD price action.
Market participants appear cautious ahead of critical US inflation data releases this week. The June CPI report on Tuesday and PPI figures on Wednesday could significantly alter expectations about the Federal Reserve's policy trajectory. Recent FOMC minutes revealed divided opinions among policymakers, with only a minority supporting imminent rate cuts despite growing trade-related economic uncertainties.
Market Drivers: Understanding the Gold Price Retreat
The precious metal's pullback reflects several competing factors. While trade tensions typically support gold, the US dollar's resilience has created headwinds. Currency markets continue to price in fewer Fed rate cuts than previously anticipated, keeping Treasury yields elevated and reducing the opportunity cost of holding non-interest-bearing assets like gold.
Technical factors also contributed to the retreat. The $3,360-$3,380 zone represents a significant resistance area where previous rallies have stalled. Some traders likely took profits after the recent upswing, waiting for clearer signals about the next directional move. The upcoming inflation prints could determine whether gold can sustain its bullish momentum or face deeper correction.
Technical Outlook: Key Levels to Watch
From a chart perspective, gold maintains constructive technicals despite the current pullback. The 4-hour chart shows the 100-period SMA acting as dynamic support near $3,340, while the $3,300 psychological level represents a more substantial floor. A decisive break above $3,380 could open the path toward $3,400, which hasn't been tested since early June.
On the downside, the $3,320-$3,300 area contains multiple technical supports including the 200-period SMA and the 38.2% Fibonacci retracement of the recent rally. Market participants will watch these levels closely, as a sustained break below $3,300 could signal deeper correction toward $3,260-$3,240 support zone.
The relative strength index (RSI) on daily charts remains in bullish territory despite cooling from overbought conditions. This suggests the current pullback may represent healthy consolidation rather than trend reversal, especially if gold can hold above key moving averages. Traders should monitor volume patterns during US trading hours for confirmation of directional bias.
