Gold Price Forecast: XAU/USD extends losing streak amid easing global trade fears

• Gold price slides to near $3,340 as tensions surrounding the global trade flow have eased.
• The US and the EU are expected to strike a tariff deal soon.
• Investors expect the Fed to leave interest rates steady next week.

Gold price (XAU/USD) extends its losing streak for the third trading day on Friday. The precious metal faces a sharp selling pressure as fears of disruption in the global trade flow have diminished, with the United States (US) remaining on a path to close a number of bilateral deals with its trading partners ahead of the August 1 tariff deal.

This week, Washington reached a trade agreement with Japan, which is one of its key trading partners, and a report from the Financial Times (FT) has shown that it will also finalize a tariff pact with the European Union (EU).

The scenario of the US striking trade agreements with its key trading partners suggests that the impact of the tariff policy introduced by President Donald Trump is not as unfavorable for the economy as it appeared earlier.

Theoretically, easing global trade tensions diminishes demand for safe-haven assets, such as Gold.

Meanwhile, a further recovery move in the US Dollar (USD) has also weighed on the Gold price. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, jumps to near 97.70. Technically, a higher US Dollar makes the Gold an expensive bet for investors.

Going forward, investors will focus on the Federal Reserve's (Fed) interest rate decision, which will be announced on Wednesday. According to the CME FedWatch tool, the Fed is certain to leave interest rates in the current range of 4.25%-4.50%.

The scenario of the Fed holding interest rates at higher levels bodes poorly for non-yielding assets, such as Gold.

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 border 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 precious metal slides to near the 20-day Exponential Moving Average (EMA), which trades around $3,355. A downside move by the Gold price below the same will turn the near-term trend to bearish.

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 uncharted territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart