Back to the Blog Main Page
08/07/25
31
Gold Struggles Below $3,350 as US Dollar and Geopolitical Tensions Rise
Gold prices declined modestly on Tuesday morning, remaining confined below the $3,350 level as market participants reassessed the impact of recent political developments and geopolitical tensions. Following a rally that saw prices nearing a five-day high of approximately $3,350, the precious metal’s gains were tempered by renewed strength in the US dollar, which edged higher amid a rebound in US Treasury bond yields and safe-haven demand.
The US dollar experienced a notable reversal in the wake of President Donald Trump’s announcement of tariffs on imports from Japan and South Korea, effective from August 1. Subsequently, additional tariffs of 25% to 40% were projected for a group of 12 other nations, heightening fears of a global trade conflict. These developments intensified global risk aversion, prompting investors to seek refuge in the US dollar while also providing support for gold. The yellow metal managed to bounce off its five-day lows of around $3,297, but its upward momentum was limited by increased US dollar demand, exacerbated by a sharp decline in the Japanese yen following the tariff announcement.
U.S. Treasury yields also responded to the increased trade tensions, rising on market speculation that the Federal Reserve might hold interest rates steady for an extended period. With inflationary pressures potentially ignited by new tariffs, the market anticipates a prolonged pause in rate hikes, supporting the US dollar’s move higher. This scenario further constrained gold, which remains under pressure amid the uncertain geopolitical landscape.
In the near term, gold pricing remains supported by ongoing trade uncertainties. The absence of key U.S. economic data and the upcoming Federal Reserve meeting minutes scheduled for Wednesday will keep traders closely engaged with geopolitical developments and tariff negotiations. Technically, prices continue to find support at the 50-day moving average around $3,322, with a break below this level potentially opening the door to lower targets at the Fibonacci retracement levels near $3,297 and the monthly low of approximately $3,248. Conversely, a sustained move above the 21-day moving average could signal a recovery toward the $3,377 resistance level, with the next major hurdle at $3,400.
Promotions
