The latest economic indicators paint a concerning picture of the U.S. economy's trajectory, with the Institute for Supply Management's purchasing managers index delivering a disappointing performance that has reverberated across financial markets.

Gold futures climbed 0.3% to $3,409.30 per troy ounce, extending gains for a second consecutive session amid growing expectations for Federal Reserve rate cuts. The precious metal has risen $81.20, or 2.47%, over two sessions as economic data fuels monetary policy speculation.

Gold Losses Ground Against Dollar Headwinds

Market analysts increasingly point to gold's gathering downward momentum, a perspective reinforced by both technical indicators and fundamental analysis. However, the critical question remains whether this extended rally has exhausted itself or if one final surge to new highs awaits before a more substantial correction unfolds.

Two Distinct Market Phases

Recent developments in international trade negotiations appear to have significantly influenced precious metals markets, contributing to gold's weaker opening and subsequent decline throughout the trading session. The precious metals complex responded to a confluence of trade-related news that strengthened the U.S. dollar and reduced demand for traditional safe-haven assets.

Gold has encountered significant selling pressure over the past three trading sessions, establishing a technically significant bearish formation that has captured the attention of market analysts.

Gold extended its decline for a second consecutive session as markets responded positively to emerging prospects for a trade agreement between the United States and European Union. The precious metal's retreat reflects broader investor sentiment shifting toward risk assets amid hopes for reduced trade tensions.

Gold prices experienced a notable decline today following news of a breakthrough trade agreement between the United States and Japan, which has renewed investor confidence about potential resolutions to ongoing trade tensions with other major partners ahead of the critical August 1st deadline.

Gold markets experienced significant momentum early Tuesday, with prices climbing to their highest levels in five weeks as the precious metal positioned itself to challenge its all-time record.