Gold lost its luster in early trading on Monday, as it experienced a notable decrease of 3%, noting that SMA 9 provides negative signals, where the price is moving beneath it on the 4-hour chart.

Gold is meanwhile trading below the first support level at $3230. If the price stays below this level, it may continue to fall, heading toward the next support level at $3135 on the short term.

If gold maintains its position above $3230, there is a possibility of a move back toward the weekly pivot at $3332. It is important to note that a close above the aforesaid pivot point could signal a shift in momentum, potentially triggering an upward movement that targets resistance levels at $3427 then $3530.

From a fundamental perspective, gold prices plunged as the United States and China agreed Monday to drastically roll back tariffs on each other’s goods for an initial 90-day period, in a surprise breakthrough that has de-escalated a punishing trade war and buoyed global markets.

That effectively means the U.S. will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%, according to the joint statement.

Regarding economic data, investors are waiting for key economic data later this week, particularly the Consumer Price Index (YoY), where analysts expect annualized inflation to stabilize at 2.4%. A higher-than-expected inflation may prompt the Fed to delay rate cuts.

Finally, Federal Reserve Chair Jerome Powell is due to speak, noting that any signals about cutting interest rates could boost gold prices, while comments regarding holding the borrowing cost for longer may have a negative impact on the yellow metal.