GOLD SUFFERED LOSSES IN THE WAKE OF U.S AND CHINA TRADE TALKThe United States and China reached a significant trade agreement on May 12, 2025, following high-level negotiations in Geneva. The agreement establishes a 90-day truce in the ongoing trade dispute, during which both countries have committed to significantly lowering tariffs on each other’s goods.
The U.S. reduced its tariff from 145% to 30%, while China cut its rate from 125% to 10%.
This move boosted investor confidence, triggering a broad risk-on rally across global markets.
As at the time of writing, gold as a safe haven suffered the most in the wake of this decision, down by 3.46%, while WTI and S&P 500 gained 4.02% and 3.95% respectively.
From a technical perspective, gold maintains a bearish outlook, characterized by a series of impulsive declines followed by corrective pullbacks to the downside. Meanwhile, prices are seen supported around $3200 demand zone.
Technically, a potential pullback would target around $3271 to $3291 and a breakout of $3300 would open the floor for a possible reversal of trend on the 2H. Whereas a break blow $3200 would likely usher in $3135 as per analysts. Meanwhile, breakout of these levels is not ruled out.
UPCOMING CATALYST
On the radar this week, the U.S. Consumer Price Index (CPI) inflation data is set for release on Tuesday, May 13 at 4:30 PM GMT+4. On Thursday at 4:30 PM GMT+4, markets will watch for Core PPI, Retail Sales Index, PPI, and Weekly Unemployment Claims. Then at 4:40 PM, Fed Chair Jerome Powell is scheduled to deliver opening remarks at the Second Thomas Laubach Research Conference in Washington, D.C.
Consumer sentiment data is scheduled for release on Friday. These data points and event have the potential to stir market volatility. Hence presenting potential risk and reward opportunities.
