Gold prices fall to $3,120 as geopolitical tensions ease and trade talks progress. Learn why gold is losing value and what to watch for in the market.
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Why Gold Prices Are Falling
Gold (XAU/USD) is dropping to $3,120 as of Thursday, according to recent market updates. This decline comes after comments from US President Donald Trump, which have calmed global fears. During a Middle East visit, Trump suggested that talks with Iran about a nuclear deal are possible, as reported by CNN. He also said Syria and Yemen should have a chance for peace. These statements have reduced worries about conflicts, causing investors to move away from safe assets like gold.
Trade Talks Add Pressure on Gold
Another reason for the drop in gold prices is progress in trade talks between the US and China. China recently lifted a ban on exporting certain goods to 28 US companies, according to Bloomberg. This step toward better relations between the two biggest economies has made gold less appealing to investors this week.
Focus on Turkey and Russia-Ukraine Talks
Investors are also watching meetings in Turkey, where US and European leaders are discussing the Russia-Ukraine conflict. However, hopes for a big breakthrough are low since Russian President Vladimir Putin is not attending.
Market Factors Affecting Gold
Rising US Yields Hurt Gold
US yields, which measure the return on government bonds, are climbing. The 10-year US yield is now at 4.54%, up from 4.11% earlier this month. Higher yields make gold, which doesn’t pay interest, less attractive to investors.
Federal Reserve’s Stance
On Wednesday, Federal Reserve Vice Chair Philip Jefferson said the Fed is ready to act if inflation changes unexpectedly. He noted that inflation pressures might not last long, but the possibility of high interest rates for a while is bad news for gold. Gold doesn’t perform well when interest rates stay high because it doesn’t generate returns like other investments.
Hedge Funds Shift Away from Gold
Some big investors are selling gold to buy stocks. For example, First Eagle Investments’ $59 billion global fund sold gold in April to invest in cheaper stocks, according to Bloomberg. This move helped the fund gain nearly 10% this year. While the fund’s manager, Matthew McLennan, still likes gold, he reduced its share to keep the fund balanced.
Technical Analysis: What’s Next for Gold?
Gold Faces More Losses
Gold is losing value quickly due to easing global tensions, fading trade war fears, and the Fed’s steady policy. If gold falls below the 55-day Simple Moving Average (SMA) at $3,120, it could drop further to $3,000 or lower.
Key Levels to Watch
If gold tries to recover, $3,167 (a high from April 3) is now a tough resistance level. Breaking through could push gold toward $3,200. For bigger gains, gold would need to hit $3,233 or even $3,289, but this would require a major event to spark interest.
On the downside, if gold breaks below $3,120, it could test $3,004 (a high from March 14), which is close to the $3,000 mark. The 100-day SMA at $2,955 is the lowest level expected for now.
Conclusion
Gold prices are under pressure as the world feels safer and trade tensions ease. With US yields rising and the Federal Reserve keeping rates steady, gold is struggling to hold its value. Investors should keep an eye on key levels like $3,130 and $3,000 to see where gold heads next.
✅ Disclaimer: Goldsilverreports.com provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
