Gold prices declined in early Friday trading and were hovering just above the $3,200 mark as the European session got underway. The de-escalation of trade tensions between the United States and China — alongside a generally less aggressive American stance towards other trading partners — has boosted risk appetite across financial markets, weighing on the appeal of the haven metal. At the same time, renewed hopes of a US-Iran agreement have raised expectations of reduced volatility in the Middle East. Ongoing negotiations between Russia and Ukraine, although lacking meaningful progress so far, are also contributing to downward pressure on gold. Conversely, weaker-than-expected US economic data has strengthened market expectations of interest rate cuts by the Federal Reserve, pushing the dollar lower and reducing Treasury yields — factors typically supporting non-yielding assets like gold. Caught between these opposing forces, gold prices may continue to face headwinds. However, significant losses below current levels appear unlikely, as despite recent optimism surrounding trade and geopolitics, uncertainty remains the dominant theme for market participants.
Ricardo Evangelista – Director, ActivTrades
Source: ActivTrader
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