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Gold continues to consolidate
Gold (XAU) has been fluctuating within a narrow range of $3,260–3,360 since the beginning of the week, due to a lack of new drivers and trade tariff news. On Monday, U.S. Treasury Secretary Scott Bessent remarked that several key U.S. trading partners have submitted 'very good' proposals designed to forestall the imposition of U.S. tariffs. He highlighted China's recent exemption of some American goods from its counter-tariffs as a signal of Beijing's intent to de-escalate trade tensions. Still, Bessent underscored that the U.S. is actively engaged in negotiations and that the responsibility ultimately lies with China to implement substantive measures to reduce trade tensions.
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Possible effects for traders
'We're starting to see the first signs of selling exhaustion', TD Securities commodity strategist Daniel Ghali said, adding that the risk of a downward correction in gold is extremely limited. 'Western investors, particularly discretionary traders or macro funds, have been completely under-positioned in this last leg of gold's rally, and as a result of that, there's a limited amount of selling activity, and gold prices are drifting higher to reflect that', Ghali added.
The bullish trend may continue, driven by increased demand for gold. 'Feedback from experts suggests that buyers are showing keen interest in various forms of gold, including higher karat gold jewellery, gold ETFs, digital gold, coins and bars, further strengthening its role in Indian households. Given the seasonal and wedding demand, strong gold buying is expected this festive season', Sachin Jain, regional executive director of World Gold Council India, wrote in a note.
XAUUSD fell during the Asian and early European trading sessions. Today, traders should continue monitoring developments around global trade tariffs. Also, U.S. macroeconomic releases may trigger extra volatility. CB Consumer Confidence and JOLTS Job Openings reports are due at 2:00 p.m. UTC. Higher-than-expected figures may pause the rally in XAUUSD but are unlikely to break the bullish trend. Lower-than-expected results may push the pair above $3,350.
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