Gold Stalls at Support—Trump’s Deal Spree Could Trigger Deeper Slide
Satendra Singh | May 08, 2025 04:28AM ET
Despite a rally on Wednesday driven by growing speculation about the Fed’s upcoming decision, gold futures fell sharply after reports suggested the possibility of renewed trade talks between the U.S. and China.
Although a warning from the Federal Reserve on Thursday prompted some investors to seek safe-haven assets, optimism over a potential U.S.–China trade deal left gold bulls uncertain. The success of any major deal remains doubtful, given the bitter history and repeated failures of past negotiations between the two major trading partners.
At present, the outlook appears to favor the bears, as gold futures signal a breakdown amid persistent uncertainty. The metal's appeal as a haven seems to be weakening at these elevated price levels, while the U.S. dollar shows signs of recovery. President Trump’s efforts to secure around 200 trade deals may further strengthen the dollar’s position.
On another front, escalating tensions between the two Asian nuclear powers—India and Pakistan—have sparked global concern. However, as most nations are pushing for de-escalation, this conflict is likely to ease soon.
While such geopolitical tensions could offer temporary support to gold bulls, the broader scenario suggests limited upside.
Based on an analysis of gold futures across multiple time frames, the technical patterns suggest mounting selling pressure this month.
Levels to Watch
Gold futures have formed a “three black crows” pattern, which could drag prices below the key support at the 200 DMA ($3320) within the next few hours. Currently, the price is attempting to hold the 100 DMA support at $3343.
If gold manages to reverse from current levels, it will face stiff resistance at the 50 DMA ($3393). Notably, a bearish crossover has formed as both the 9 DMA and 20 DMA have crossed below the 50 DMA, which may extend short-term selling pressure.
Gold is currently trying to hold immediate support at the 9 DMA ($3325), though it looks poised to slip below the 20 DMA at $3313. A confirmed breakdown beneath this level could lead to a test of the next key support at the 50 DMA ($3132).
Conversely, any bounce in gold may face strong resistance at $3396. Only a sustained breakout above this level could open the path toward the next resistance at $3447.
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Disclaimer: Readers are advised to take any position in gold at their own risk. This analysis is based solely on technical observations.
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