Gold prices dropped over 0.50% on Monday, trading at $3,336. This decline followed reduced demand for safe-haven assets after US President Donald Trump postponed tariffs on goods from the European Union. Trading volumes were low due to market closures in the UK and US for holidays. Trump’s announcement to delay tariffs until July 9 boosted market confidence, which put pressure on gold prices despite a 4.86% increase last week—the largest gain since early April. On Friday, gold prices rose as Trump pressured Apple to manufacture iPhones in the US, threatening significant tariffs.

Gold Price Trends Amid Changing Demand

Gold prices are likely to keep rising, especially after data revealed that China’s gold imports from Hong Kong doubled in April compared to March. Geopolitical tensions are also high, with Russia’s ongoing military actions against Ukraine eliciting responses from Trump. Upcoming US economic reports include Durable Goods Orders, FOMC meeting minutes, GDP estimates, and the Core PCE Price Index. There are worries about the US fiscal deficit after Moody’s downgraded its debt rating, which also supports a positive outlook for gold. Technical analysis suggests that if gold stays above $3,300, it may test or surpass previous highs. On the other hand, if it falls below $3,300, prices could decline further toward recent lows. The sharp decline in gold prices on Monday, settling around $3,336, reflects a temporary change in sentiment due to recent news. Relief from tariff delays on EU goods reduced the demand for safe-haven assets. Even though the decline was noticeable, it should be seen in the context of last week’s 4.86% gain—gold’s strongest performance in over a month. Thus, Monday’s movement appears more like a pause than a reversal. Thin trading contributed to erratic price movements, as both UK and US markets were closed. In such environments, any headline can cause significant price shifts, which we observed. Traders must account for low-volume distortions when evaluating these price levels.

Influence of US Trade Policy and Geopolitical Tensions

The shift in sentiment away from safe-haven assets was primarily due to a policy change from Washington. By moving the tariff deadline to July, Trump introduced short-term optimism for global trade, which applied downward pressure on gold. This shift isn’t based on changing fundamentals but rather a repositioning in response to new information. Underneath it all, there remains strong support for gold. April saw a significant increase in Chinese demand, shown by the doubling of imports through Hong Kong. This type of demand signifies strong end-user interest and cannot be easily ignored. When a major importer increases consumption significantly, it creates a foundation for medium-term support, even if speculative buying fluctuates in the short term. The broader geopolitical context also plays a crucial role. Ongoing military actions by Russia have heightened market tensions, and Trump’s responses have added more uncertainty. This scenario supports a long-term demand for gold, especially alongside concerns about fiscal stability. For example, Moody’s recent debt rating downgrade indicates underlying stress in the US financial outlook. Concerns over widening deficits are among the key factors that typically support gold prices in the upcoming months. Looking ahead, we focus on the US economic calendar. Important data to watch includes durable goods orders, preliminary GDP estimates, the Core PCE Price Index (the Fed’s preferred measure of inflation), and the latest minutes from the FOMC meeting. Each of these could alter rate expectations, influence the strength of the dollar, and impact metal prices. We will review these as they are released. From a technical standpoint, the $3,300 support level remains crucial. If prices hold above this area, we expect another attempt to rise toward April’s highs. Conversely, if prices drop below this support, recent lows around $3,260 may draw market attention in the coming sessions. The balance of the market will depend on how traders adjust around this key level. Traders should remain flexible in their strategies. The market’s reaction is very sensitive to any changes in rate expectations or geopolitical developments. Headline risks are increasing and fragmenting, making it essential to align technical analysis with a clear understanding of macroeconomic drivers. We are closely monitoring market flows and sentiment changes in both options and futures markets. Early signs indicate that traders are focusing more on protective strategies rather than directional bets, suggesting that market participants are cautious and unconvinced about significant trends at this moment. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now