Strong Dollar and Trade Optimism Trigger Gold Sell-off

Gold (XAU/USD) came under renewed selling pressure during the session as a strengthening US Dollar sapped demand for the precious metal, driven by a shift in global risk sentiment tied to geopolitical developments.

Easing Tensions Dent Safe-Haven Demand

The primary catalyst for the sell-off appears to be emerging signs of easing trade tensions between the United States and China.

• Risk-On Shift: Improved trade rhetoric boosts risk appetite, diverting capital from defensive assets into equities.
• Dollar Dominance: The rise in the USD renders gold more expensive for holders of other currencies.

Market Outlook

The broader market remains sensitive to the Fed's interest rate path, which remains the dominant long-term driver for XAU/USD valuations.

Technicals

• Technical bias leans bearish as long as the USD maintains upward momentum.