Gold’s price is falling, with XAU/USD below $3,330, down over 1%. This dip is attributed to rising US Treasury yields and lower demand for safe-haven assets. In June, US Durable Goods Orders fell by 9.3%, which was less than anticipated but still raises concerns about economic growth. The easing of global trade tensions is contributing to Gold’s decline. US President Donald Trump is working on trade deals, including discussions with China scheduled in Stockholm, hoping to extend the current tariff pause. If these negotiations fail, tariffs may rise, impacting market sentiment and Gold’s demand.

Economic Indicators Impacting Gold

US Initial Jobless Claims dropped to 217,000, indicating a strong labor market and easing pressure on the Federal Reserve to cut rates. This situation supports the US Dollar, putting further downward pressure on Gold. Market predictions show a 62.3% chance of a rate cut in September. Gold’s technical outlook warns of a possible break below key support levels. XAU/USD is around $3,327, and if it stays below certain points, it could hit the $3,200 range. If it manages to reclaim the $3,340 level, it may signal positive momentum toward recent highs. Tariffs, which are taxes on imports meant to protect local businesses, have differing opinions on their economic effects. Gold faces challenges due to rising US Treasury yields, which have recently climbed back toward 4.5%. Recent data, such as Initial Jobless Claims remaining steady at 222,000, points to a resilient economy, decreasing the demand for safe-haven investments. This strength in the US economy supports the dollar and complicates conditions for Gold.

Gold’s Potential Amid Rising Geopolitical Tensions

Despite the challenges, Gold still holds potential, particularly as global trade tensions increase. The recent announcement from the White House about new tariffs on Chinese electric vehicles and solar cells signals a renewed escalation. Historically, geopolitical uncertainty has led capital to flow toward Gold, as demonstrated during the 2018-2019 trade war when Gold prices rose over 20%. Market attention is geared toward future actions by the Federal Reserve, as interest rate cuts remain a possibility. The CME FedWatch Tool shows traders are pricing in a nearly 65% chance of a rate cut by September, a figure consistent with previous estimates. Lower rates would reduce the opportunity cost of holding non-yielding Gold, potentially spurring significant buying activity. Given this mixed outlook, derivative traders should think about strategies that manage risk while positioning for potential breakouts. One option is to buy put options with a strike price below the $2,300 support level to guard against a downturn fueled by economic strength. Conversely, buying call options above the $2,350 resistance could capture gains if trade tensions or a dovish pivot from the central bank propels Gold higher. Create your live VT Markets account and start trading now.

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