Gold (XAUUSD) Price Forecast: Trade Hopes Sink Gold Toward 50-Day MA at $3338.20

Gold Slumps as Trade Optimism Undermines Safe-Haven Appeal

Gold prices fell sharply for a second consecutive session on Thursday, retreating from Wednesday’s early surge that peaked at $3439.04. Despite testing resistance near the June 16 high of $3451.53, bulls failed to push through, triggering a reversal as improving global trade sentiment reduced the appetite for safe-haven assets.

At 12:11 GMT, XAU/USD is trading $3363.30, down $24.15 or -0.71%.

Trade Developments Between U.S., Japan, and EU Drive Risk-On Sentiment

The market’s risk appetite improved following a finalized trade agreement between the U.S. and Japan earlier this week. Adding to the momentum, European Union officials signaled progress toward a trade deal with the U.S., which may include a 15% baseline tariff on EU goods and potential exemptions. These developments lifted equities to fresh highs and pressured gold lower.

“Gold is down this morning due to the positive news flow around global trade… this is reducing downside risks for global growth and supports the prevailing risk-on mood in financial markets,” said Carsten Menke, analyst at Julius Baer.

While central bank buying continues, Menke noted it is not as aggressive as earlier in the year, further dampening near-term support.

Gold Pressures Key Technical Levels Near $3347 and the 50-Day Moving Average

The first immediate support for gold lies at $3347.97, followed closely by the 50-day moving average at $3338.20. A breach of this level would challenge the “buy the dip” narrative and potentially open the door to the next pivot at $3310.48. Price action near the 50-day will be closely watched by traders as a gauge of underlying conviction.

The recent price rejection near $3450 reinforces the idea that gold buyers are hesitant to chase strength, preferring instead to enter on weakness—if the technicals hold.

Fed, ECB Policy in Focus as Rates Stay Low

While trade optimism dampens near-term demand for gold, accommodative central bank policy remains a longer-term supportive factor. The Federal Reserve is expected to keep rates unchanged at its July 29–30 meeting, with markets increasingly pricing in a rate cut as early as September. President Trump’s visit to the Fed on Thursday could add political tension, potentially impacting future policy direction.

The European Central Bank is also expected to leave rates steady, maintaining a low-rate environment that historically favors non-yielding assets like gold.

Gold Prices Forecast: Bearish Momentum Builds Below Resistance

The failure to break above $3451 and the subsequent move toward the 50-day moving average signal weakening short-term momentum. If gold breaks below $3338, bearish pressure could intensify, exposing $3310 as the next downside target.

However, as long as central banks remain dovish and geopolitical risks linger, the longer-term gold prices forecast remains supported. Near-term outlook: bearish unless key support holds.

More Information in our Economic Calendar.