Gold prices slipped during Wednesday’s Asian session as demand eased amid cautious investor sentiment. The market weighed recent optimism about US-EU trade relations after the EU agreed to accelerate talks with Washington, aiming to prevent a transatlantic trade war.
Despite this positive development, traders remain wary amid broader risks, including the expanding US budget deficit, geopolitical tensions in the Middle East and Ukraine, and uncertainty surrounding ongoing trade negotiations. Attention now focuses on the Federal Open Market Committee (FOMC) minutes due Wednesday and Friday’s Personal Consumption Expenditures (PCE) inflation data, both expected to clarify the Federal Reserve’s future interest rate path.
Technical Outlook on Gold
Since April 22, 2025, gold has been confined within a descending channel marked by lower highs and lower lows. Recently, the metal faced rejection at the channel’s upper boundary and the resistance zone between $3,335 and $3,355. This suggests potential downside risk, with a likely retest of the order block between $3,280 and $3,295. Should that level fail to hold, prices could extend losses toward the support zone near $3,205 to $3,225.
Japan’s Fiscal Concerns Amid Rising Yields
Japanese Finance Minister Katsunobu Kato warned Tuesday that rising bond yields could increase debt servicing costs, placing added strain on Japan’s public finances. With the government preparing for an auction of super-long bonds later this week, officials pledged close monitoring of the bond market.
Global selling of long-dated bonds has intensified recently, fueled by the Bank of Japan’s reduced bond purchases and political uncertainty over economic stimulus measures. This has increased market volatility ahead of Japan’s upcoming debt issuance.
Japan 225 Technical Insight
The Japan 225 index has recovered from support between 31,700 and 32,200 and has followed a bullish trend since early April 2025, marked by higher highs and higher lows. The index recently retested and found support in the 36,200 to 36,500 swap zone, pushing higher. A breakout above the 38,400 to 38,700 order block could propel the index toward the resistance range of 40,200 to 40,500.
Swiss Franc Supported Amid Fed and SNB Signals
The Swiss franc held near one-month highs around 0.82 against the US dollar, buoyed by a weaker greenback and easing safe-haven demand after President Trump delayed tariffs on EU imports.
Despite five consecutive Swiss National Bank (SNB) rate cuts since March 2024, bringing the key rate down from 1.75% to 0.25%, markets anticipate another reduction to zero at the June 19 policy meeting. SNB Chairman Martin Schlegel pointed to subdued inflation, a strong franc, geopolitical risks, and market volatility as factors prompting continued monetary easing. He reaffirmed the SNB’s readiness to intervene in currency markets and adopt negative rates if necessary to maintain price stability.
USD/CHF Technical Analysis
The USD/CHF pair remains in a bearish trend characterized by lower highs and lower lows. It currently tests support between 0.8170 and 0.8200. If this zone holds, the pair may rally to challenge resistance between 0.8290 and 0.8325. However, failure to hold support could push the pair down toward the next support level between 0.8055 and 0.8085.
