Gold loses upward momentum after breaking out of channel borders

Gold prices started the week with a moderately negative bias, having retreated from the all-time high of $3,245 an ounce reached during Monday's Asian session. Partial profit-taking following the rapid rally is exerting pressure on the metal.

An improvement in global risk sentiment amid the United States' moves to soften its tariff policy is an additional deterrent. President Donald Trump temporarily excluded smartphones and computers from the list of goods subject to reciprocal tariffs. This has somewhat eased tensions in trade relations with China. Although Beijing raised tariffs on US imports to 125% on Friday in response to the US actions, the market views the current escalation as temporary and controlled.

On the macroeconomic front, the US dollar remains weak, limiting the depth of gold's correction. The US consumer price index slowed to 2.4% in March, the lowest level since 2021, adding to expectations of a Fed rate cut. The market is pricing in up to 90 basis point rate cuts by the end of 2025.

However, the unexpected rise in US Treasury yields and signs of a rebalancing of capital flows towards the dollar may point to a gradual shift in market sentiment. If the upcoming US retail sales data and speeches by Fed officials, including Jerome Powell on Wednesday, are interpreted as a signal for more cautious rate cuts, interest in the precious metal as a safe-haven asset could decline.

Technical analysis suggests that gold prices on the H4 timeframe are showing a slowdown in the upward momentum. The price has breached the upper border of the daily ascending channel (D1). However, a reversal took place when it reached its morning high. The chart shows a prolonged divergence between the price's highs and the Relative Strength Index (RSI, 14), indicating a bearish divergence — a potential reversal or correction signal.

Signal:

Short-term prospects for gold suggest selling.

The target is at the level of 3100.00.

Part of the profit should be taken near the level of 3160.00.

A stop-loss could be placed at the level of 3330.00.

The bearish scenario is short-term, so trade volume should not exceed 2% of your balance.