Gold prices experienced a modest retreat in early Tuesday trading, slipping from the monthly high of $3,392 reached during the Asian session. Investor focus now turns to the upcoming U.S. JOLTS Job Openings report, although broader market sentiment continues to be shaped by escalating trade tensions.
Trade and Geopolitical Fears Support Gold Outlook
Despite the pullback, gold remains buoyed by renewed geopolitical and trade concerns. Market anxiety intensified following U.S. President Donald Trump’s announcement last Friday of a tariff hike on steel and aluminum imports to 50%, aimed at bolstering domestic industry. The move reignited fears over economic policy uncertainty and pressured the U.S. Dollar.
Further inflaming tensions, Trump accused China via a Truth Social post of reneging on its commitment to mutually roll back tariffs and obstructing shipments critical to the industrial supply chain. According to a Reuters report on Monday, the Trump administration is racing to finalize a trade agreement ahead of a self-imposed Wednesday deadline.
Dollar Recovery Caps Gold Upside for Now
In Tuesday’s early trading, the U.S. Dollar found some stability as traders appeared to be covering short positions in anticipation of key employment data due this week, starting with the JOLTS report. Strong jobs numbers could reinforce the Federal Reserve’s cautious monetary stance, offering support to the greenback and potentially limiting gold’s near-term upside.
Technical Outlook: Gold Still Shows Bullish Momentum
On the technical front, gold remains on solid footing. After defending support at the 21-day Simple Moving Average (SMA), the metal broke above a descending trendline resistance around $3,346, closing Monday at $3,382.
Currently, gold is consolidating near $3,377, which corresponds to the 23.6% Fibonacci retracement level of April’s record-breaking rally. Bulls are eyeing a firm break above $3,400 to resume the climb toward all-time highs around $3,500. However, the May peak at $3,439 must first be surpassed.
The 14-day Relative Strength Index (RSI) is drifting lower but remains above the midpoint, indicating a continued bullish bias. On the downside, a decisive drop below the former trendline resistance, now turned support at $3,341, could trigger further declines. Next key support lies near $3,300—a confluence of the 21-day SMA and the 38.2% Fibonacci level. A deeper correction may find a floor near $3,232, where the 50-day SMA and 50% Fibonacci level converge.
