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6 June 2025,08:37

Daily Market Analysis

Gold Slightly Retreats on Trade Optimism

6 June 2025, 08:37

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 Key Takeaways:

*Renewed US-China diplomatic contact lifts market sentiment

*Risk appetite rebounds slightly, aiding risk-sensitive currencies

*Dollar continues to slide on weak US jobs data

*Gold dips modestly but maintains bullish fundamentals amid USD softness and US debt risks

Market Summary:

Global risk sentiment improved modestly after US President Donald Trump revealed he had a “very good” phone call with Chinese President Xi Jinping, marking the first direct contact between the leaders since the start of the US-China trade tensions. Trump said he had accepted an invitation to visit China and reciprocated with an invite to Xi for a White House visit—although no official confirmation has been issued by Beijing.

While the diplomatic engagement sparked cautious optimism, many investors remained fatigued by the on-and-off trade headlines, opting to wait for more concrete progress or finalized trade agreements before fully repositioning.

In currency markets, improved sentiment boosted demand for riskier currencies such as the euro and British pound, while the US Dollar Index extended losses. Sentiment toward the dollar weakened further after another downbeat US jobs report, with initial jobless claims rising to 247K, missing expectations of 236K. The increase suggests softness in the labor market, which, combined with recent weak ADP employment and PMI data, is fueling concerns over the broader economic outlook.

Traders are now turning their attention to the upcoming US Nonfarm Payrolls (NFP) and unemployment rate data, which could determine the dollar’s near-term direction. With several trade agreements already signed and tariff rhetoric cooling, economic data could become the primary catalyst for dollar movements going forward.

Technical Analysis

GOLD, H4: 

Gold initially dipped in response to improved market sentiment but found strong buying interest near the ascending trendline and key support zone at 3345.00, a level that has historically acted as a solid base. The rebound suggests that bulls are defending this level aggressively.

Technical indicators:

  • MACD shows diminishing bearish momentum, with a potential bullish crossover forming
  • RSI has bounced from oversold territory and currently stands at 46, indicating a recovery in bullish strength without yet reaching overbought conditions.

A break above the immediate resistance at 3370.00 would confirm a bullish breakout and open the path toward the next key resistance at 3400.00. However, failure to breach 3370.00 may result in continued consolidation within the current range.

Resistance levels: 3370.00, 3400.00
Support levels: 3345.00, 3325.00

Dollar_Index, H4: 

The Dollar Index remains under pressure, continuing to trade within a well-defined descending channel, reflecting persistent bearish bias. Currently, it is testing the crucial support level at 98.60.

Despite the prevailing downtrend, technical indicators suggest that a short-term technical rebound may be on the horizon:

  • MACD is showing waning bearish momentum, with a golden cross forming, indicating a possible shift in momentum.
  • RSI has risen from oversold territory and is currently at 45, suggesting early signs of bullish recovery.

A break above the descending channel’s upper boundary and the key resistance at 99.55 would indicate a potential trend reversal or at least a deeper correction, with the next upside target seen near 100.55. However, sustained weakness below 98.60 would reinforce the bearish structure, with downside risk

toward 98.00.Resistance levels: 99.55, 100.55
Support levels: 98.60, 98.00

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