Gold prices have dropped for the third day in a row, now at $3,298, down $11 after an earlier rise of $8. This decline comes as US-China trade discussions continue, confirmed by US officials. US and Chinese trade teams are set to meet in London this week for more talks. Meanwhile, the Group of Seven (G7) summit is happening from June 15-17 in Canada, where there may be announcements about trade agreements. A deal with Canada is also expected this week. A recent Kitco survey shows that opinions about gold prices are nearly split. Some expect prices to rise (bulls), while others predict a decline (bears). Despite hopes that Asian buyers would help balance out selling from the US, this hasn’t happened yet today. As prices continue to drop, what started as a small daily decline has turned into a longer losing streak. Gold’s current price of $3,298 is driven by strong selling pressure, despite a brief bounce in the early session. The earlier gain of $8 was quickly wiped out by renewed downward pressure. So far, the anticipated buying interest from Asia hasn’t appeared, making price support weak. The cautious sentiment is primarily due to ongoing US-China discussions. The confirmed meetings in London have created some anticipation, but until there are clear signs of progress, uncertainty continues to push traders to take risks elsewhere, diverting focus from gold. The G7 summit in Canada is also a major event to watch. Although gold typically benefits from geopolitical tension, current market behavior indicates that traders are more interested in solid agreements rather than speculation, particularly regarding the expected deal with Canada. The Kitco data shows that market sentiment is almost evenly divided. Such indecision often leads to range-bound trading, but the continued price softness shows that sellers (bears) are currently stronger than buyers (bulls). The lack of buying from Asia has diminished earlier hopes that the East would absorb selling from the West. In the derivatives markets, which depend on changes in volatility and clear price direction, support zones are becoming thinner, revealing downside risks. When planning for this week, open delta levels around $3,300 seemed neutral, but further losses could lower sensitivity. We feel cautiously defensive. If the price doesn’t stabilize before the political summit, it’s often a signal to avoid relying on weak support. Although volatility is low, with prices dropping and macro risks approaching, it’s unlikely to remain calm. Trading desks may start adjusting their ranges if the London meeting yields clear outcomes, but with low volumes heading into the summer, traders are not pushing positions. As prices struggle to hold, we’ve noticed changes in open interest for monthly expirations. Some options that previously attracted safe-haven investments are losing interest faster than usual, indicating that traders may be shifting their strategies. This isn’t a complete withdrawal, but it shows unease about holding positions ahead of potential market-moving announcements. We will keep an eye on buying activity to see if there are signs of renewed interest, but until we see consistent buying at these lower levels, it’s best to remain cautious regarding strategies. Larger price movements may happen later this week when news breaks, but current trading activity leans more towards reducing risks rather than seeking new opportunities.

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