Gold Price Forecast: XAU/USD slumps to near $3,360, fails to break triangle on upside

• Gold price falls significantly as hopes of US-EU trade agreement ease global trade tensions.
• Washington has slashed baseline and automobile tariff rate on imports from Tokyo to 15%.
• The next major trigger for the Gold price will be Fed's monetary policy announcement.

Gold price (XAU/USD) trades almost 0.7% lower around $3,360 during the European trading session on Thursday. The precious metal faces a sharp selling pressure as global trade worries have eased amid hopes that the United States (US) and the European Union (EU) will close a trade agreement before the August 1 tariff deadline.

On Wednesday, a report from Financial Times (FT) showed that EU officials have signaled green signal to a trade pact with the US to avert a damaging trade war. Market experts believe the US-Japan deal confirmed on Tuesday increased fears among EU officials that they could their automobile export market share in the US economy, as Washington has slashed tariffs on cars from Tokyo to 15%.

The minutes of the US-Japan deal showed that the baseline and automobile levy on imports from Tokyo to Washington will be 15%. The US charges 25% import duty on all foreign cars, which is separate from the baseline tariff rate.

Easing global trade tensions have diminished demand for safe-haven assets, such as Gold.

Meanwhile, a slight recovery move in the US Dollar (US) seen during the day has also weighed on the Gold price. Technically, a higher US Dollar makes the Gold price an expensive bet for investors.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, rebounds to near 97.40 after posting a fresh over two-week low near 97.00 earlier in the day.

Going forward, the major trigger for the Gold price will be the Federal Reserve's (Fed) monetary policy meeting, which is scheduled for next week.

Gold technical analysis

Gold price faces selling pressure after failing to break the Symmetrical Triangle formation on the upside - a move that often leads to volatility expansion. The upward-sloping trendline of the above-mentioned chart pattern is placed from the May 15 low of $3,120.83, while its downward-sloping border is plotted from the April 22 high around $3,500

The 20-day Exponential Moving Average (EMA) still acts as a key support area for the Gold price around $3,355.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, suggesting selling pressure at higher levels.

The Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245.

Looking up, the Gold price will enter in an unchartered territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart