Gold prices are showing slight declines, supported by ongoing trade tensions. XAU/USD has risen above its 50-day Simple Moving Average (SMA) of $3,321 after briefly falling below $3,300 earlier in the European session. US President Donald Trump announced a 25% tariff on all exports to the US from Japan, effective August 1. This decision, along with strong US labor data, has strengthened the US Dollar and reduced the likelihood of a Federal Reserve interest rate cut.

Trade Tensions And Global Impact

The US plans to introduce tariffs on several countries starting August 1. The BRICS summit is currently taking place, where countries like Brazil, Russia, India, China, and South Africa are aiming to reduce their dependence on the US Dollar. This has led to discussions about de-dollarisation. Technical analysis of gold shows a symmetrical triangle pattern, suggesting a possible breakout. The price is trying to remain above $3,300, with potential downside targets at $3,228 and $3,164 if it drops. Conversely, if prices recover, key resistance levels are at $3,350 and $3,371. The Relative Strength Index (RSI) is hovering around a neutral level of 49. Recently, gold prices have only dropped slightly, with external pressures providing some support. Trade disputes have become prominent again, especially after the US announced a new 25% tariff on Japanese exports. This decision, which will take effect in August, adds more tension to already delicate global trade relationships. It coincided with a resilient US labor market report, boosting the Dollar and reducing expectations for a near-term rate cut by the Federal Reserve. Gold has moved back above its 50-day SMA, reaching $3,321 after earlier dipping below the critical $3,300 mark. While this increase is modest, it indicates that buyers are not completely absent. There is still demand eager to enter below $3,300, although this could be challenged if broader economic conditions don’t improve.

BRICS Summit And De-Dollarisation

Meanwhile, the BRICS summit is advancing discussions on de-dollarisation. With Brazil, Russia, India, China, and South Africa sharing ideas, there are growing concerns about the future of reserve currencies and their impact on commodity prices. While this topic isn’t new, the urgency has increased due to rising Western sanctions and a more divided global financial landscape. Technically, the symmetrical triangle pattern is continuing to form. These patterns often become tighter before prices move in either direction. Currently, we are just above the lower boundary, and gold is testing the patience of this range. If it breaks below $3,300, we would then watch for support at $3,228 and $3,164. If buyers regain strength, particularly if support at $3,300 holds, we would look for resistance near $3,350 and $3,371. The market might need a new catalyst for a decisive move outside of this range. The RSI at 49 indicates balanced momentum, with no strong bias in either direction. This neutral reading suggests that traders are cautious, with no significant buildup of long or short positions. Volumes are slightly declining, which is often a sign of a potential breakout. We should seek directional confirmation before making adjustments. There’s little technical basis for aggressive strategies until prices shift outside the defined pattern. For now, traders might consider short positions near resistance and long positions near support, using tight stop-loss orders. However, as the pattern develops, narrower strategies could become riskier. In the coming weeks, sensitivity to geopolitical statements and unexpected economic news will likely increase due to the compressed price movements on the charts. Rapid responses to data, central bank meetings, and further developments from BRICS discussions could lead to significant price changes. Timing entries around these events will be more critical than usual, especially given the lack of a strong trend across most metals. The market is unlikely to stay calm for much longer. Create your live VT Markets account and start trading now.

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