Gold May Drop Further Below the $3,200 Level in the Short Term

Gold (XAU/USD) faces the risk of a deeper decline if the following factors continue to develop unfavorably for the precious metal:

📌 1. Continued Improvement in US-China Relations
• The joint statement between the US and China has eased trade tensions.
• If both sides announce more concrete agreements or actions (such as tariff reductions or market access), safe-haven demand may weaken significantly, leading to gold sell-offs.

📌 2. Sustained Strength in the US Dollar
• The USD is strengthening on expectations that the Fed will maintain higher interest rates for longer.
• Capital continues to flow into the USD rather than gold, especially as US bond yields rise.

📌 3. Lack of Supportive News for Gold
• Geopolitical risk factors have temporarily subsided.
• Inflationary pressure is no longer strong enough to support gold prices as before.

📉 Key Support Levels Ahead

If gold breaks below the $3,200 level, the next potential support zones include:
• $3,185 – a recent short-term low (if applicable)
• $3,160 – $3,170 – a technical support confluence zone
• $3,140 – a strong psychological support level, and a potential target if a sell-off intensifies

⚠️ Recommendation

• If gold decisively breaks below $3,200 with rising volume and continued positive developments in US-China trade, the downtrend could accelerate.
• Traders should monitor the $3,195–$3,200 range closely to assess whether to expand short positions.