US-China optimism, GOLD falls sharply from target levelIn early morning trading on Wednesday (May 7), spot OANDA:XAUUSD fell sharply by nearly 2%. Bloomberg said that despite the escalation of military conflict between India and Pakistan, signs of progress in trade negotiations between the United States and China have limited demand for safe-haven assets.
Previously, gold prices had surged for two consecutive trading days. Spot gold prices rose nearly 3% on Tuesday.
China and the United States announced that U.S. Treasury Secretary Besant and U.S. Trade Representative Greer will travel to Switzerland to meet with Chinese Vice Premier He Lifeng.
Today (Wednesday), a spokesperson for the Chinese Ministry of Commerce answered reporters' questions about the high-level economic and trade negotiations between China and the United States. The spokesperson said that China has decided to cooperate with the United States.
Vice Premier He Lifeng, as head of the China-US economic and trade negotiation team, will hold talks with his US counterpart, US Treasury Secretary Benson, during a visit to Switzerland. It is the first such meeting since US President Donald Trump imposed sweeping tariffs on China and has raised optimism that the two largest economies could reach a deal.
Gold prices have risen nearly 30% this year as Trump’s aggressive trade and geopolitical policies have caused widespread market turmoil and investors have sought safe havens. Gold hit a record high of $3,500 an ounce in April but has fallen in recent weeks.
The Federal Reserve will announce its interest rate decision later Wednesday, and policymakers are expected to keep rates unchanged despite Trump’s repeated criticism of Fed Chair Powell for not cutting rates.
Fed officials have often stressed the need to wait and see how the trade policies implemented last month will affect the economy. Lower borrowing costs tend to be good for gold.
Technical Outlook Analysis OANDA:XAUUSD
After gold achieved the target increase noted by readers in yesterday's edition at 3,430 USD, it has fallen significantly in the early trading session today (7 May). But the downside momentum is also limited by the 0.236% Fibonacci retracement level, which is noted as the nearest support level and for gold to continue to increase in price, it needs to achieve the condition of recovering and breaking the 3,430 USD level after which traders can think about the 3,500 USD level in the near future.
During the day, in the overall picture, gold still has a bullish outlook with the long-term rising price channel and the short-term rising price channel as the trend and support from the EMA21 moving average.
As long as gold remains above the EMA21 and within/above the aforementioned price channels, the overall outlook remains bullish, but you should also note that in the current market environment, price movements of 2-3%/day are very common, so technical positions need to be firmly established (preferably at confluences where multiple indicators are present).
My notable positions will be listed as follows.
Support: 3,371 – 3,350 USD
Resistance: 3,400 – 3,430 USD
SELL XAUUSD PRICE 3440 - 3438⚡️
↠↠ Stop Loss 3444
→Take Profit 1 3432
↨
→Take Profit 2 3426
BUY XAUUSD PRICE 3337 - 3339⚡️
↠↠ Stop Loss 3333
→Take Profit 1 3345
↨
→Take Profit 2 3351
