Gold Retreats on Improved Trade Outlook Amid Weak Dollar and Steady Technical Signals

Gold prices retreated slightly on July 24, trading around $3,377 per ounce during the morning session. This follows yesterday’s pullback from near $3,422 as easing global trade tensions reduced demand for safe-haven assets.

Yesterday’s 1.3% decline was primarily driven by optimism surrounding recent U.S.-Japan and potential U.S.-EU trade agreements. These developments boosted investor risk appetite, pressuring gold down from recent highs.

However, the fall in gold was moderated by continued weakness in the U.S. dollar, which remains near a two-week low. Additionally, declining yields on U.S. Treasury bonds supported gold by making non-yielding assets comparatively more attractive.

From a technical viewpoint, gold‘s daily chart shows it remains comfortably above its key moving averages, notably the 50-day and 200-day lines. This indicates the overall uptrend remains intact despite recent volatility.

On the 4-hour chart, gold continues to trade within an upward-sloping channel. It currently tests critical support around the $3,370-$3,415 range. Resistance stands firm near $3,440, marking the recent area of profit-taking and consolidation.

The Relative Strength Index (RSI) is neutral at around 54, reflecting neither overbought nor oversold conditions. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator shows bullish sentiment flattening out.

This suggests a temporary consolidation rather than a trend reversal. Bollinger Bands further illustrate this scenario. The bands, set around the 20-period moving average, have narrowed, signaling decreased volatility and potential sideways movement in the short term.

In terms of global liquidity, the NDQ index—the yellow line—remains stable. It indicates sufficient market liquidity and investor participation without signaling major shifts.

Fundamentally, continued central bank gold purchases, particularly from China, India, Poland, and Türkiye, remain supportive. Retail gold demand has also risen notably, particularly in bar and coin investments across Asia.

Meanwhile, ETF inflows remain robust, with global gold funds attracting over $8 billion year-to-date. This underscores sustained investor interest, although recent trade developments temper bullish enthusiasm temporarily.

Investors now look ahead to crucial economic data, including the European Central Bank’s rate decision and upcoming U.S. employment and manufacturing indicators. These data points could significantly influence gold’s near-term trajectory.