Gold (XAU/USD) continued its downward slide on Monday, marking a third straight session of losses as it extended its retreat from a near one-month high just above $3,400. During the Asian session, the precious metal briefly dipped below the $3,300 mark, reaching a one-week low, though the decline lacked strong momentum due to broad weakness in the U.S. Dollar.
Investor sentiment remains cautious ahead of high-level trade negotiations between the United States and China, set to take place in London later today. Persistent geopolitical tensions, including the Russia-Ukraine conflict and global financial uncertainty, are providing some safe-haven support to gold, allowing it to recoup part of its early session losses.
However, optimism for a sustained rebound appears capped amid diminishing expectations for additional interest rate cuts by the U.S. Federal Reserve this year. Friday’s Nonfarm Payrolls report showed the U.S. economy added 139,000 jobs in May—above the 130,000 consensus, though down from April’s revised figure of 147,000. Unemployment held steady at 4.2%, and wage growth beat forecasts, holding at 3.9% versus the expected 3.7%.
This stronger-than-expected labor market data has led markets to scale back their rate cut projections, keeping U.S. Treasury yields elevated and weighing on the non-yielding gold. Still, traders remain hesitant to make aggressive bearish bets, given the mix of conflicting signals and geopolitical risk.
Adding to the tension, U.S. President Donald Trump renewed pressure on Federal Reserve Chair Jerome Powell, calling for a full percentage point rate cut. While the central bank is widely expected to hold rates steady in the near term, traders are still pricing in a possible cut by September.
Meanwhile, markets are closely watching the outcome of the upcoming U.S.-China talks. President Trump described a recent call with Chinese leader Xi Jinping as “very positive,” raising hopes of progress in resolving the prolonged trade dispute.
Technical Outlook
From a technical standpoint, gold is showing resilience just below the $3,300 mark and the 200-period Simple Moving Average (SMA) on the 4-hour chart. A decisive break below this level could open the door for further downside toward $3,283–$3,282, with extended losses possibly targeting $3,245 and then $3,200.
Conversely, any significant upside attempt is likely to face strong resistance near $3,352–$3,353. A sustained breakout above this zone may trigger short-covering and allow bulls to test the $3,377–$3,378 range, with the potential to retake $3,400. Continued strength could push gold toward the $3,425–$3,430 region and even challenge the all-time high around $3,500 set in April.
