Gold Nears $3,308 Support as RSI Signals Rebound After $100+ Drop
Gold prices have fallen to their lowest in three weeks as global tensions ease and the US dollar strengthens, reducing demand.
Quick overview
- Gold prices have dropped to their lowest in three weeks, trading around $3,319 due to a stronger US dollar and easing global tensions.
- The dollar index has risen above 106.20, making gold more expensive for foreign holders and reducing demand for safe-haven assets.
- Key technical support is at $3,308, with potential rebounds targeting $3,343 and $3,363 if bullish momentum can be regained.
- Traders are closely monitoring upcoming US PCE inflation data and geopolitical developments for potential triggers to influence gold prices.
Gold prices have fallen to their lowest in three weeks as global tensions ease and the US dollar strengthens, reducing demand. Spot gold (XAU/USD) is trading around $3,319 after a $100+ drop last week as fears of a US-China trade war dissipate and the greenback firms. The Reuters report says upbeat US economic data and cooling global risk aversion are killing the appetite for safe-haven metals.
The decline came as the dollar index (DXY) rose above 106.20 making gold more expensive for holders of other currencies. Traders also reacted to China de-escalating, with Beijing toning down its rhetoric after tit-for-tat tariff threats. With fewer catalysts to push gold higher, bulls are clinging to key technical levels to avoid a deeper pullback.
Gold (XAU/USD) Technical Levels to Watch: $3,308 Holds the Line
On the 4-hour chart, gold has broken below its rising price channel and the 50-period SMA ($3,363), a clear short-term trend change. But $3,308 is holding for now.
What makes this level important:
- It’s the previous consolidation zone from early July.
- The RSI is at 35.94, not oversold yet, but showing bullish divergence.
- A bounce from here could target $3,343 and then the 50-SMA at $3,363.
If this level fails, the next levels are $3,284 and $3,262. These could attract dip buyers but only if broader sentiment shifts back in gold’s favor. Until then, the bias is cautious.
What Could Trigger the Next Gold Move?
Gold is struggling technically but macro triggers are key. Traders are watching for:
- US PCE inflation data later this week
- Any new geopolitical flare-ups, especially in Taiwan or the Middle East
- A drop in the dollar or US yields that could spark safe-haven demand
Unless one of these triggers happens, gold may stay range bound. Short-term bounce is possible but a break above $3,363 with volume is needed to confirm momentum.
Key Takeaways:
- Gold trades at $3,319, just above critical $3,308 support.
- RSI divergence hints at a possible rebound.
- Bulls must reclaim $3,343 and $3,363 to regain momentum.
- Dollar strength and cooling trade war fears continue to pressure sentiment.
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