Insights 
VT 
Key points
- Spot gold drops 0.2% to $3,423.08 after Trump’s $550B trade pact with Japan lifts risk appetite
- Rising dollar and 10Y yields pressure bullion, capping its three-day winning streak
Gold prices edged lower on Wednesday, cooling off after a sharp three-day rally as markets digested the latest U.S.-Japan trade agreement. Spot gold declined 0.2% to $3,423.08 per ounce, while U.S. gold futures also fell 0.2% to $3,435.90.
The move came after prices touched $3,438.93, the highest level since 16 June, before losing steam.
The deal, announced by President Trump, promises a reduced tariff of 15% on Japanese auto imports, down from the previously threatened 25%.
In exchange, Japan will direct a $550 billion investment and loan package into the U.S., boosting investor sentiment and sparking a rotation out of safe haven assets.
Technical Analysis
Gold surged on Monday evening, with prices climbing from a low of $3383.36 to a sharp peak of $3438.93 before momentum tapered. Since then, price has settled into a narrow band just above the 3420 mark, with volatility drying up.
Picture: Gold chills after a sharp sprint, as seen on the VT Markets app
The MACD histogram shows waning bullish momentum, while the lines remain flat near the zero axis, suggesting indecision.
The 15-minute moving averages are now flattened and converging—pointing to a consolidation phase. Traders should watch for a clean breakout above $3440 or a breakdown below $3416 for fresh directional cues, especially as markets digest recent geopolitical headlines and US macro prints.
Dollar And Yields Add Pressure
The U.S. dollar index (USDX) rose 0.1%, adding to gold’s woes by increasing the relative cost for non-dollar buyers.
Meanwhile, the 10-year U.S. Treasury yield rebounded from near two-week lows, further undercutting gold by raising the opportunity cost of holding non-yielding metal.
With U.S. and Chinese officials set to meet in Stockholm next week and the Fed’s policy meeting on July 29–30, traders will watch closely for signals on rate outlook and geopolitical direction.
At present, markets expect rates to remain on hold, though sticky inflation or fresh data could shake assumptions.
Cautious Forecast
Gold’s short-term rally appears to have stalled at $3,438, with broader risk sentiment improving and safe haven flows fading. If yields and the dollar continue to strengthen, gold may struggle to reclaim momentum.
A period of consolidation between $3,416 and $3,438 is likely ahead of the Fed’s decision. Traders should remain vigilant, especially if geopolitical talks or macro data introduce fresh volatility.
