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Gold (XAUUSD) is under pressure as investors react to strong US economic data and rising hopes for a US-EU trade deal. Improved sentiment is shifting capital away from safe-haven assets. Jobless claims beat expectations, reinforcing the strength of the labour market. This supports higher interest rates, which boost the US Dollar and weigh on gold. At the same time, trade optimism is reducing fear-driven buying. These factors are pulling gold prices lower in the short term, despite a bullish long-term setup.
 

Gold Prices Slide as US Jobs Strength and Trade Talks Weigh on Safe-Haven Demand

Gold is facing selling pressure for the second consecutive day. Investors are shifting toward riskier assets due to improved sentiment. Hopes for a US-EU trade deal have reduced the demand for safe-haven assets, such as gold. Markets are reacting to positive comments from both US and EU leaders. This optimism is drawing capital away from defensive positions, such as gold.

Economic data also weighs on gold prices. Weekly jobless claims fell to 217,000, beating expectations and showing labour market strength. Substantial employment numbers support the case for higher interest rates, which boosts the US Dollar and hurts gold. Continuing claims also came in slightly below forecasts, reinforcing confidence in the labour market. A robust job market provides the Fed with more flexibility to maintain high interest rates.

Global PMI data adds mixed signals. US manufacturing slipped into contraction with a reading of 49.5, but optimism over trade talks remains high. Comments from US and EU leaders suggest a deal could be near, which has further limited gold's upside momentum. The EU is pushing for clarity on key tariff sectors, especially autos and pharma. Progress in these talks could further reduce demand for gold as a haven.
 

Multi-Year Technical Breakout Suggests Significant Gold Rally Ahead

The gold chart below shows over fifty years of price history and highlights a massive technical pattern often referred to as the "cup and handle." This formation is considered one of the most bullish in technical analysis. The cup began forming in 2011, following gold's first major rally of the year. Prices then corrected and consolidated for nearly a decade, eventually creating the base of the cup by 2020. A strong rally formed the right side of the cup, followed by a narrow handle of sideways movements between 2020 and 2024.
 

(Click on image to enlarge)

In early 2025, gold broke out of the handle near the $2,100 mark. This breakout above long-standing resistance is visible on the chart. Following the breakout, prices surged above $3,350, with strong momentum indicating further upside potential. The pattern also aligns with a long-term wedge, drawn from the 1980 and 2011 highs, that gold has now broken out of. Historically, such technical moves have often led to extended and powerful rallies.

Projections based on the chart suggest that gold could target levels significantly higher than $5,000. Some analysts even envision a price range of $8,000 to $10,000 if global conditions remain supportive. The bullish case isn't purely technical—it also reflects ongoing inflation, weaker currencies, and international economic uncertainty. Central banks continue to accumulate gold, reinforcing the fundamental case for sustained price growth in the years to come.
 

Conclusion

Gold is at a critical juncture, balancing between strong bullish technical signals and short-term fundamental pressure. While trade optimism and solid US job data have reduced safe-haven demand, the long-term breakout pattern suggests significant upside potential. Investors are watching closely as momentum builds above key resistance levels. If macroeconomic conditions support the trend, gold could enter a powerful new bull phase. 

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