Gold Echoes Uncertainty as Trade Truce Between US and China Lacks Depth

The global spotlight was on Busan today as President Donald Trump and President Xi Jinping met. Many hoped for a turning point in the US-China trade dispute. Yet, as the dust settles, traders and investors are left with more questions than answers. The highly anticipated summit offered few concrete solutions. Gold futures are rallying due to unresolved trade tensions, persistent uncertainty from the Federal Reserve, and ongoing geopolitical risks.

Gold futures jumped after a run of losses as traders digested comments from President Donald Trump following his closely watched meeting with Chinese President Xi Jinping, which produced a trade deal that may stop short of a sweeping agreement.

Today, gold futures tested a low at $3928.17 and a day’s high at $3994.75. They are now trading at $3984.31, well below the significant resistance at $4042. Yesterday’s high saw a sharp sell-off after the Federal Reserve announced a 25 basis point rate cut. This rate cut was already priced in before the announcement.

Technically, this recovery in gold futures looks weak as the futures have already witnessed a loss of approximately 9.52% from the peak while trading below the imminent bearish crossover, formed with a downward move by the 9 DMA that is about to move below the 20 DMA.

However, gold futures have been constantly declining at a 67-degree fall since testing a record peak on Oct. 20, 2025, at $4398 amid hopes of a permanent trade deal between the two major economies of the world. Trump said he had an “amazing meeting” with Xi and would immediately have fentanyl tariffs rise to 10% in a deal that will see China restart soybean imports and pause rare-earth licensing for a year.

I find that if the gold futures fail to overcome the immediate resistance at $4039 today, exhaustion is likely to continue as the massive buying spree by the central banks seems to be easing at the current levels, and the shifting flow of money from gold to other risky assets could trigger a selling spree in gold.

On the lower side, if the gold futures don’t hold above the immediate support at $3894, currently prevailing bearish pressure could push the futures to test the next significant support at the 50 DMA ($3834) before this week’s closing.

Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based only on observations.