XAUUSD has broken the Ascending channel on the upside
Gold had a rough Friday. After showing strength earlier in the week, it stumbled and seems set to finish the week in the red. What’s causing this unexpected shift? A mix of global uncertainty, confusing headlines, and investors changing their strategy.
Friday’s drop didn’t happen in a vacuum. It was mostly driven by profit-taking—traders closing their positions and securing gains. But underneath that was something much bigger: a sudden change in how people see the ongoing trade situation between the United States and China.
President Trump gave markets hope by suggesting trade talks were happening. Investors reacted quickly, pulling money out of safe-haven assets like gold and moving it into stocks. But just as fast, China responded—denying that any trade talks were actually taking place. That contradiction created a cloud of doubt, and gold prices felt the heat.
Confusion Over US-China Trade Sparks Market Movement
The seesawing news from Washington and Beijing has been one of the biggest factors affecting global markets lately. And gold, as usual, finds itself caught in the middle.
Conflicting Headlines Stir Doubt
Early Friday, Bloomberg dropped a report that caught everyone’s attention. It suggested China was thinking about removing tariffs on some US goods. This wasn’t out of goodwill—it was more of a reaction to soaring costs that are becoming harder to manage at home. That gave the impression things might be improving on the trade front.
But in the same breath, there were reports that China was drawing up emergency plans to cushion against external threats. They’re looking at new tools and financial policies, which signals that they’re still bracing for impact rather than expecting peace.
When news like this breaks, it sends ripples through every market. Gold, often seen as a safety blanket during chaos, tends to lose its edge when investors think stability is on the horizon. That’s why prices dropped—at least for now.
Central Banks Still Love Gold (And That’s a Big Deal)
While traders may be backing away from gold in the short term, central banks are doubling down.
Kenya Eyes Gold Reserves
Kenya’s central bank recently hinted at adding gold to its reserves. The idea? Diversify away from heavy reliance on major currencies like the dollar. That’s a smart move—especially at a time when currency markets are unstable and inflation fears are creeping in.
XAUUSD is moving in a descending channel
This strategy isn’t unique to Kenya. Countries across the globe have been quietly increasing their gold holdings, seeing it as a reliable long-term asset. It’s a strong sign that gold is still considered a trustworthy store of value.
Switzerland Books Big Profits
Then there’s Switzerland. The Swiss National Bank just reported a hefty 6.7 billion Swiss Francs profit in the first quarter of 2025—largely thanks to gold holdings. That’s a massive win and a reminder that despite short-term volatility, gold can deliver major long-term rewards.
China’s Retail Gold Craze: What’s Driving the Buzz?
In China, the love for gold is on a whole new level—and it’s not just about reserves.
A recent rally in gold prices sparked a buying spree across the country. Everyday investors jumped in, causing trading volumes to explode on the Shanghai exchange. It wasn’t just professional traders—regular folks were getting in on the action too.
The result? A surge in activity that became so intense, Chinese regulators had to step in with warnings. They urged caution, reminding people that while gold can be exciting, it can also be unpredictable.
It’s easy to see why demand spiked. In times of global tension, many people in China view gold as a stable investment. The combination of economic unease and the chance to profit from big swings in price made it irresistible.
What Could Be Next for Gold?
So, where does this leave gold going forward?
Honestly, it depends on how the global landscape evolves. Right now, optimism around trade talks—whether real or rumored—is pushing investors toward riskier assets. That puts pressure on gold.
There’s also news that the US and South Korea might strike a new trade understanding soon. If more deals like that come through, expect to see gold take a back seat for a bit.
But if things reverse—and they often do—gold could be back in the spotlight. That’s the nature of the market: today’s risk can become tomorrow’s caution, and gold usually shines brightest when uncertainty returns.
Final Thoughts: Gold’s Long Game Is Far from Over
While this week wasn’t gold’s best, it’s far from the end of the road. A combination of shifting trade talks, global uncertainty, and short-term profit-taking led to a temporary dip. But beneath all that noise, the demand for gold—especially from central banks and retail investors in Asia—is still strong.
From Kenya’s interest in diversifying reserves to Switzerland’s massive profits, gold continues to prove its worth as a long-term asset. And with so much uncertainty still in the air, it wouldn’t take much for gold to bounce back.
In the end, gold remains a powerful symbol of security and value. This week’s dip might just be a pit stop before the next big climb.
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