XAUUSD is moving in a Descending Triangle, and the market has reached the support area of the pattern
#XAUUSD Analysis Video
Gold’s long-standing role as a safe haven asset just hit a speed bump — and it’s a big one. The recent decision by the United States and China to lower tariffs on each other’s goods has triggered a wave of optimism across global markets. That optimism has investors ditching the safety of gold and diving headfirst into riskier assets.
The deal is simple but impactful. For the next 90 days:
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China will cut its tariffs on US goods to 10%, a massive drop from 125%.
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The US will reduce tariffs on Chinese goods to 30%, down from 145%.
This unexpected move brought a breath of fresh air to trade relations, and with it came a quick reaction from investors. Safe-haven demand dried up almost instantly, and gold prices started to drop sharply as capital flowed into more aggressive plays like stocks and oil.
Markets Shift Gears: From Fear to Confidence
As soon as the tariff news hit the wires, it was clear: this wasn’t just a diplomatic win — it was a market mover. All across the board, investors changed their tune.
What Happened Next? A Quick Look Around the Markets
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Bond yields surged, especially in the US. The 10-year Treasury yield climbed to 4.43%, reflecting expectations of stronger growth and a possible uptick in inflation.
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Oil prices jumped by over 2% as expectations for rising demand kicked in. With trade tensions cooling, businesses are expected to ramp up production — and that means more energy consumption.
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Stock markets rallied hard. Chinese equities climbed over 1%, and US futures jumped between 2.5% and 3%. Even European indices saw noticeable gains.
This wave of risk-on sentiment spelled bad news for gold, which saw its recent rally come to an abrupt end. The metal had hit record highs back in April, but with the appetite for riskier assets growing, its momentum slowed sharply.
Gold’s Role in Question (At Least for Now)
Gold has always been the go-to during times of uncertainty. When fear takes over and investors seek shelter, they turn to gold. But the US-China deal flipped the script. With both countries signaling a willingness to cooperate — at least temporarily — the sense of urgency that had driven gold’s recent rise quickly faded.
Why the Sudden Drop in Demand for Gold?
The answer is simple: confidence is returning. When people believe that economic conditions will improve and global trade will recover, they’re more likely to invest in higher-yielding assets. Gold, while a great store of value, doesn’t offer income or growth potential. In booming markets, that can be a tough sell.
XAUUSD is moving in a descending channel, and the market has reached the lower low area of the channel
And let’s not overlook the power of messaging. US President Donald Trump took to social media urging people to “buy stocks now.” That kind of public push adds fuel to the fire — especially among retail investors eager to ride the next big rally.
What Leaders Are Saying About the Deal
The sentiment from both countries suggests that this deal could be more than just a short-term fix. US Treasury Secretary Scott Bessent made it clear: the goal is not to decouple the two economies. Instead, both sides are looking for ways to deepen cooperation and improve access.
He also hinted at the possibility of a purchasing agreement, which could open Chinese markets more widely to US exports. That would be a big win for American manufacturers and could keep trade relations on a positive path — a further blow to gold’s appeal if the optimism holds.
Final Summary: A Temporary Truce, A Permanent Impact?
So, what’s the takeaway here? The US-China tariff agreement, even if temporary, has reshaped the financial landscape — at least for the short term. Investors are once again embracing risk, betting on stronger global trade, and shifting their money out of traditional safe havens like gold.
That doesn’t mean gold’s story is over. If the deal collapses or inflation rises too fast, gold could quickly regain its shine. But for now, it’s clear: confidence is back, and the markets are on the move.
As long as the truce holds and economic data remains solid, gold may have to wait for its next moment in the spotlight.
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