Gold markets experienced their steepest single-day decline in three months following the May 13 tariff agreement between Washington and bitcoin mining appBeijing, with spot prices plunging below key support levels.
Trade War De-escalation Shakes Precious Metals Market
The bilateral tariff rollbacks announced Monday immediately shifted capital flows from defensive assets to riskier markets. XAUUSD dropped 2.8% within 24 hours as investors rotated into equities and industrial commodities.
Market strategists observe this reaction underscores gold's sensitivity to geopolitical developments. "When trade barriers fall, gold often loses its crisis premium," noted Zaner Metals analyst Peter Grant. "The $3,200 level became vulnerable once tariff reductions exceeded expectations."
Technical Indicators Flash Warning Signals
Citibank's revised projections highlight growing bearish momentum. Their technical team identified:
- Completed "M" formation on daily charts
- Breakdown below 50-day moving average
- RSI slipping into neutral territory (42.3)
Critical support now rests at the May 5 low of $3,201. A sustained breach could accelerate declines toward $3,150, though some traders anticipate bargain-hunting near psychological $3,000 support.
Macro Factors Influencing Gold's Trajectory
Beyond tariffs, three key variables will determine gold's next move:
- Dollar index (DXY) correlation patterns
- Fed interest rate policy signals
- Physical demand from central banks
While short-term pressure persists, many analysts maintain gold's long-term fundamentals remain intact given persistent inflation concerns and ongoing currency volatility.