Gold Forecast: Gold prices continue to fall in the previous three trading days
2025-07-28 23:08:48
Gold turned lower during the U.S. session on Monday (July 28), extending the decline of the previous three trading days. Gold prices ended up falling just under 0.4% last week, reflecting the recurring theme of weak trading. In fact, as investors' attention increasingly turns to stocks, pushing global indices to record highs, the overall gold forecast remains in a range-bound state.
Gold prices weaken as stock market gains
Although stock index futures have retreated sharply from earlier highs, the overall recent trend is quite strong. The announcement of multiple international trade agreements in recent weeks has rekindled market optimism about international trade, driving the stock market higher. As a result, risk appetite has recovered, reducing the immediate demand for safe-haven assets such as gold. To make matters worse, the US dollar exchange rate has strengthened and rebounded slightly, further pressuring gold denominated in US dollars.
Yet, despite recent underperformance, gold has not completely collapsed. The failure to set new highs in recent months suggests that momentum is fading, but also suggests that a sharp sell-off is unlikely. Inflationary pressures, especially from Trump's tariff regime and expansionary fiscal agenda, continue to provide underlying support. This backdrop provides the basis for a more nuanced gold forecast: while the upside is currently limited, the downside risks may be equally limited.
Transatlantic trade tensions and tech gains in focus
At the macro level, trade dynamics determine the direction of the market. A major agreement between the EU and the US imposes a 15% across-the-board tariff on a wide range of goods, while Brussels has pledged to buy $750 billion of US energy and invest a further $600 billion. Notably, steel and aluminum remain exceptions and are still subject to punitive tariffs of up to 50% - a decision that could spark further political wrangling.
Meanwhile, China and the United States appear ready to extend their trade truce by 90 days. A new round of negotiations is reportedly set to resume in Sweden soon. These developments could temper short-term volatility and indirectly affect the gold forecast by influencing overall risk sentiment.
Looking ahead: Fed comments and US economic data
All eyes will be on the Federal Reserve's policy meeting on Wednesday. No one expects a rate cut, but markets will be reading every word from Fed Chairman Jerome Powell for clues on future monetary policy. Given recent high inflation and strong economic data, the future policy path remains controversial.
In addition to the Fed, investors will also face a series of key economic indicators this week, from GDP to employment data. These data points will further shed light on the strength of the U.S. economy and the timing of any potential policy shifts - developments that could directly affect the gold forecast in the coming weeks.
In addition, earnings reports from tech giants such as Amazon, Apple, Meta and Microsoft will also affect the market. Given their huge influence on market sentiment, any unexpected situation may trigger a chain reaction in various assets, including gold.
Technical analysis: Testing bullish trend line
(Source of spot gold daily chart: Yihuitong)
From a technical perspective, the long-term technical picture for gold remains constructive, but market confidence is beginning to waver. Gold is once again hovering around the key 2025 bullish trend line, currently in the $3,320-3,330 range. A decisive break below this trend line could mark the beginning of a more volatile phase and significantly change the short-term gold forecast.
The near-term support at $3,300 remains solid. Below this, the June low of $3,247 will be the next key mark. On the upside, resistance lies at $3,350, $3,385, and $3,430. Bulls need to break through these barriers to have a hope of recapture the highs from earlier this year.
In short, the overall gold forecast remains in a delicate balance. Macroeconomic headwinds ranging from a stronger dollar to rising risk appetite have limited upside momentum. However, structural inflation concerns and ongoing geopolitical tensions provide a support buffer. With technical levels being tested and key data released this week, the next major move in gold could be around the corner.
Gold prices weaken as stock market gains
Although stock index futures have retreated sharply from earlier highs, the overall recent trend is quite strong. The announcement of multiple international trade agreements in recent weeks has rekindled market optimism about international trade, driving the stock market higher. As a result, risk appetite has recovered, reducing the immediate demand for safe-haven assets such as gold. To make matters worse, the US dollar exchange rate has strengthened and rebounded slightly, further pressuring gold denominated in US dollars.
Yet, despite recent underperformance, gold has not completely collapsed. The failure to set new highs in recent months suggests that momentum is fading, but also suggests that a sharp sell-off is unlikely. Inflationary pressures, especially from Trump's tariff regime and expansionary fiscal agenda, continue to provide underlying support. This backdrop provides the basis for a more nuanced gold forecast: while the upside is currently limited, the downside risks may be equally limited.
Transatlantic trade tensions and tech gains in focus
At the macro level, trade dynamics determine the direction of the market. A major agreement between the EU and the US imposes a 15% across-the-board tariff on a wide range of goods, while Brussels has pledged to buy $750 billion of US energy and invest a further $600 billion. Notably, steel and aluminum remain exceptions and are still subject to punitive tariffs of up to 50% - a decision that could spark further political wrangling.
Meanwhile, China and the United States appear ready to extend their trade truce by 90 days. A new round of negotiations is reportedly set to resume in Sweden soon. These developments could temper short-term volatility and indirectly affect the gold forecast by influencing overall risk sentiment.
Looking ahead: Fed comments and US economic data
All eyes will be on the Federal Reserve's policy meeting on Wednesday. No one expects a rate cut, but markets will be reading every word from Fed Chairman Jerome Powell for clues on future monetary policy. Given recent high inflation and strong economic data, the future policy path remains controversial.
In addition to the Fed, investors will also face a series of key economic indicators this week, from GDP to employment data. These data points will further shed light on the strength of the U.S. economy and the timing of any potential policy shifts - developments that could directly affect the gold forecast in the coming weeks.
In addition, earnings reports from tech giants such as Amazon, Apple, Meta and Microsoft will also affect the market. Given their huge influence on market sentiment, any unexpected situation may trigger a chain reaction in various assets, including gold.
Technical analysis: Testing bullish trend line
(Source of spot gold daily chart: Yihuitong)
From a technical perspective, the long-term technical picture for gold remains constructive, but market confidence is beginning to waver. Gold is once again hovering around the key 2025 bullish trend line, currently in the $3,320-3,330 range. A decisive break below this trend line could mark the beginning of a more volatile phase and significantly change the short-term gold forecast.
The near-term support at $3,300 remains solid. Below this, the June low of $3,247 will be the next key mark. On the upside, resistance lies at $3,350, $3,385, and $3,430. Bulls need to break through these barriers to have a hope of recapture the highs from earlier this year.
In short, the overall gold forecast remains in a delicate balance. Macroeconomic headwinds ranging from a stronger dollar to rising risk appetite have limited upside momentum. However, structural inflation concerns and ongoing geopolitical tensions provide a support buffer. With technical levels being tested and key data released this week, the next major move in gold could be around the corner.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
