With the continued rebound of the US dollar and the boom in technology stocks, will the gold price fall below 3,300?
2025-07-29 15:36:14
Gold prices struggled to extend their previous rebound from $3,302, although bears took a breather ahead of the release of medium-importance U.S. data later on Tuesday (July 29). Gold prices took a breather ahead of key U.S. event risks. Gold buyers took the opportunity to try to make a move as traders tried to close short positions and adjust positions ahead of key U.S. second quarter GDP data and the Fed's policy statement on Wednesday. The market style tended to be cautious, digesting the recent trade agreement reached by the United States with major allies, and at the same time, the market was in a wait-and-see mood as the first round of trade talks between the United States and China in Stockholm will continue on Tuesday.
Reports that the U.S.-China trade truce could be extended for another quarter appeared to provide some support for the precious metal, which was also supported by a rebound in demand for gold as a hedge against inflation, as oil prices surged following Trump's threat of tougher sanctions on Russia's oil exports if it fails to make progress toward ending the war in Ukraine in 10 to 12 days.
However, given that the US dollar is likely to regain upward momentum due to the improving US economy and progress in the trade agreement, as well as the resurgence of the AI and robotics narrative led by technology giants in the equity market, it remains to be seen whether gold prices can continue the rebound trend late on Monday.
On Monday (July 28), the U.S. dollar rose again against its main rivals, as the market realized that the terms of the trade deal between the United States and the European Union were favorable to the United States, while having little effect on the economic prospects of the European Union, according to Reuters. France and Germany quickly condemned the U.S.-EU trade deal, saying that the European Union succumbed to the demands of U.S. President Donald Trump and reached an unequal agreement to impose a uniform 15% tariff on EU goods. During the Asian and European session on Tuesday, the U.S. dollar index continued to rise, once hitting a nearly one-month high of around 99.01, still suppressing gold prices.
On Monday, the three major U.S. stock market rose and fell. The Nasdaq and S&P 500 continued their upward trend and set new historical highs. The S&P 500 closed up 1.13 points, up 0.02%, at 6389.7 points, barely breaking the historical high of 6388.64 points on July 25, setting a new record. Technology giants and chip stocks: Tesla and Nvidia are unstoppable. The strong performance of technology stocks is the main reason for the Nasdaq to set a new high, especially the continued popularity of AI-related stocks. The resurgence of technology narratives such as robots and AI has focused the market's attention on global technology equity assets.
The daily chart shows that gold prices still face downside risks, especially after breaking below the key rising trend line support of $3,352 last Friday. The 14-day RSI is below the midline and is currently close to 45, which also confirms its downside potential. Gold prices may retest the nearly three-week low of $3,302. If it falls below this level, it will test the low of July 9 near $3,283. The last line of defense for gold buyers is at the low of $3,248 on June 30.
On the other hand, a daily close above the strong support-turned-resistance level near $3,345 would be crucial for initiating a meaningful rebound. This level represents the intersection of rising trendline resistance, the 20-day moving average, and the 50-day moving average. Further upside resistance lies near the static resistance level of $3,380, which, if broken, could open the door to $3,400.
(Spot gold daily chart, source: Yihuitong)
At 15:34 Beijing time, spot gold was trading at $3313.53 per ounce.
Reports that the U.S.-China trade truce could be extended for another quarter appeared to provide some support for the precious metal, which was also supported by a rebound in demand for gold as a hedge against inflation, as oil prices surged following Trump's threat of tougher sanctions on Russia's oil exports if it fails to make progress toward ending the war in Ukraine in 10 to 12 days.
However, given that the US dollar is likely to regain upward momentum due to the improving US economy and progress in the trade agreement, as well as the resurgence of the AI and robotics narrative led by technology giants in the equity market, it remains to be seen whether gold prices can continue the rebound trend late on Monday.
On Monday (July 28), the U.S. dollar rose again against its main rivals, as the market realized that the terms of the trade deal between the United States and the European Union were favorable to the United States, while having little effect on the economic prospects of the European Union, according to Reuters. France and Germany quickly condemned the U.S.-EU trade deal, saying that the European Union succumbed to the demands of U.S. President Donald Trump and reached an unequal agreement to impose a uniform 15% tariff on EU goods. During the Asian and European session on Tuesday, the U.S. dollar index continued to rise, once hitting a nearly one-month high of around 99.01, still suppressing gold prices.
On Monday, the three major U.S. stock market rose and fell. The Nasdaq and S&P 500 continued their upward trend and set new historical highs. The S&P 500 closed up 1.13 points, up 0.02%, at 6389.7 points, barely breaking the historical high of 6388.64 points on July 25, setting a new record. Technology giants and chip stocks: Tesla and Nvidia are unstoppable. The strong performance of technology stocks is the main reason for the Nasdaq to set a new high, especially the continued popularity of AI-related stocks. The resurgence of technology narratives such as robots and AI has focused the market's attention on global technology equity assets.
The daily chart shows that gold prices still face downside risks, especially after breaking below the key rising trend line support of $3,352 last Friday. The 14-day RSI is below the midline and is currently close to 45, which also confirms its downside potential. Gold prices may retest the nearly three-week low of $3,302. If it falls below this level, it will test the low of July 9 near $3,283. The last line of defense for gold buyers is at the low of $3,248 on June 30.
On the other hand, a daily close above the strong support-turned-resistance level near $3,345 would be crucial for initiating a meaningful rebound. This level represents the intersection of rising trendline resistance, the 20-day moving average, and the 50-day moving average. Further upside resistance lies near the static resistance level of $3,380, which, if broken, could open the door to $3,400.
(Spot gold daily chart, source: Yihuitong)
At 15:34 Beijing time, spot gold was trading at $3313.53 per ounce.
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