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Gold prices are facing a tough end to the week as market sentiment remains fragile. Investors are trying to navigate the growing confusion surrounding U.S.-China trade relations. President Trump’s remarks suggest ongoing talks, while China appears to deny any such engagement. Meanwhile, fluctuating headlines and conflicting economic signals have left markets volatile and uncertain. This is affecting the momentum in gold prices, as seen in the recent price action.
 

Gold Under Pressure as US-China Trade Confusion Clouds Market Outlook

Gold faces pressure as uncertainty rises around US-China trade talks. President Trump hinted at ongoing negotiations. However, China denied any discussions. This mixed messaging created confusion and spooked markets. Traders responded by pulling back from safe-haven assets like gold.

Economic headlines also shook investor sentiment. Bloomberg reported that China may exempt some US goods from tariffs. Rising costs forced this potential shift in policy. At the same time, China is preparing emergency financial tools. These moves signal stress in the global economy, reducing confidence in long-term gold demand.

Central bank activity added more weight to the story. The Swiss National Bank reported a massive profit from its gold holdings. Meanwhile, Kenya’s central bank is considering adding gold to its reserves. Retail demand surged in China, leading to high trading volumes and regulatory warnings. These developments reflect gold’s recent popularity, but also hint at overheating in the market.
 

Technical Analysis

The daily chart for gold shows that the price moved steadily within an ascending channel, making higher highs and higher lows. Gold (XAU/USD) has had an impressive run over the past several months. The momentum strengthened further in early 2025 when price action broke out of this channel, forming an ascending broadening wedge. This pattern often signals increasing volatility and can be a warning sign of a potential reversal.

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The wedge formation saw prices pushing higher but with widening ranges. This shows aggressive buying but also uncertainty. Eventually, gold prices reached a key resistance near $3,400, which triggered the formation of a bearish hammer. This candlestick pattern is often a reversal signal, especially when it appears after a strong bullish trend.

Following this pattern, gold prices saw a sharp drop. The chart shows a strong support level near the $3,100 zone. This level was previously resistant and now serves as a key pivot point. Price briefly retested it after breaking out of the wedge. If gold continues to move lower, this area will likely be tested again.

The bearish hammer indicates selling pressure at the top, and traders may view this as a potential turning point. The recent price structure suggests caution. Buyers are getting exhausted, and any additional negative headlines could add pressure.
 

Conclusion

Gold price is on the back foot, almost erasing recent gains, and looks set to end the week lower. The down move comes amid increasing confusion over the status of the trade conflict between the United States (US) and China. US President Donald Trump gives the impression that talks are taking place, while China denies it. Bloomberg released a headline stating that China is considering exempting some US goods from tariffs as costs are rising out of control. The news caused sharp reactions and volatility in the markets. At the same time, Bloomberg also reported that the country is preparing emergency plans to deal with external shocks with new finance and policy tools.

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