Gold prices plunge as renewed optimism dampens demand for safe-haven assets

Gold prices dropped roughly 2.5% at the start of the week, pressured by positive developments, including the US-China trade deal and an India-Pakistan ceasefire, which dampened safe-haven demand.

Optimism over avoiding a disastrous escalation in the US-China trade conflict bolstered the US dollar, pushing gold to a near two-week low.

Traders are now watching for potential direct peace talks between Russia and Ukraine, where any progress could further weigh on gold.

A decisive break below the key \$3,300 support area (psychological level and 38.2% Fibonacci retracement of the \$2,956–\$3,500 rally) has weakened the short-term outlook, as negative momentum intensified, and the 10/20-day moving averages formed a bearish crossover.

The decline pierced another critical support at \$3,228 (50% Fibonacci retracement and daily Kijun-sen), with bears now targeting \$3,200 (the lower boundary of the recent consolidation). A break below this level would complete a failure swing pattern on the daily chart, signaling a stronger bearish reversal.

However, some resistance is expected around the \$3,200 mark due to its significance, with any rebound likely to provide selling opportunities as long as bearish factors persist.

Former supports at \$3,292/\$3,300 have turned into solid resistance, capping potential recoveries and maintaining bearish pressure.

A break below \$3,200 would expose targets at \$3,164 (61.8% Fibonacci), \$3,100 (round figure), and \$3,084 (76.4% Fibonacci of \$2,956–\$3,500).

Res: 3242; 3265; 3292; 3310
Sup: 3200; 3164; 3116; 3100