Gold's record-breaking ascent appears to have paused, though it still managed to create several historic milestones. On Monday, the most active June futures contract closed at an all-time high of $3,435.10. Tuesday saw June gold reach an unprecedented intraday peak of $3,509.90. For the week, however, June gold experienced a fractional decline of $11.10 (-0.33%), settling at $3,330.20.
This modest weekly decline contrasts with the strong gains of the previous two weeks. During the week ending April 11, gold futures surged by $198.80 (6.51%), followed by last week's gain of $86.40 (2.65%), for a combined increase of $285.20.
Gold's performance since December 30 has been nothing short of phenomenal. Over 17 trading weeks, gold gained $848.50 (31.86%). This week marks just one of three instances during this period where gold closed below its opening value.
This week's decline resulted from both dollar strength and active selling by market participants. The dollar index advanced 0.19%, while June gold gained 0.33% against the dollar, indicating that selling pressure accounted for approximately 0.14% of the price decrease.
The dollar strength and gold selling reflected market sentiment that trade tensions between the United States and China have begun to ease. This marks the first weekly gain for the US dollar since mid-March, likely resulting from China granting tariff exemptions for some US imports, raising hopes that the trade war between the world's two largest economies may be abating.
China is currently considering exempting certain US imports from its 125% tariffs and has asked businesses to identify potentially eligible goods. According to Forbes, both Donald Trump and Chinese President Xi Jinping remain locked in a tit-for-tat trade war, with each side willing to escalate despite inflation concerns. The top 15 imports from China last year were valued at more than $190 billion, representing over 43% of all Chinese imports.
An interesting technical aspect of gold's price action this week was the formation of a "shooting star" candlestick pattern. This pattern typically emerges after a strong uptrend near resistance levels or at the peak of an uptrend. It features a small real body (minimal difference between Monday's opening and Friday's closing prices) positioned near the bottom of the trading range, with an upper wick at least three times the length of the real body.
This candlestick formation often signals that the current uptrend has peaked and that a reversal from bullish to bearish sentiment may be imminent. For confirmation, traders will watch whether next week produces a large red candle with lower high, lower low, and lower closing price compared to this week.
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