gold prices retreated from over one-month highs above $3,400 amid a cautious market environment on Tuesday. The precious metal, which had previously surged nearly 1.5% on Monday, pulled back as investors paused to assess the unfolding developments surrounding US trade negotiations and monetary policy outlooks.
The decline follows a period of profit-taking following recent gains, with traders awaiting further clarity on prospective trade agreements ahead of the upcoming August 1 deadline. A notable aspect impacting gold ’s price movement is the recent stabilization of the US dollar —bafter declines earlier in the week — coupled with a pause in the sell-off of US Treasury yields. These factors have lessened the appeal of the dollar-denominated asset, providing some support to gold .
Uncertainty surrounding US trade relations continues to influence market sentiment. Reports suggest that the US is seeking increased concessions from the European Union, including potential tariff hikes, while negotiations with Japan face their own political hurdles. Such geopolitical and economic uncertainties have kept the US dollar under pressure, despite a strong equity market rally that has diminished its safe-haven appeal.
From a technical perspective, gold continues to hold above key moving averages, with momentum indicators suggesting sustained buying interest. For the current session, traders are monitoring the $3,400 level as a crucial support zone; a breach below this could prompt a test of the $3,377 region, which has acted as previous resistance and now support. Conversely, sustained strength above $3,400 may target the $3,440 resistance zone.
Historically, gold remains a key asset during turbulent times due to its status as a store of value and hedge against inflation. Central banks globally continue to diversify reserves into gold , with record purchases recorded in recent years, notably among emerging economies. gold ’s inverse correlation with the US dollar and US Treasuries underpins its role as a safe haven, especially when geopolitical tensions or economic uncertainties escalate. Price movements continue to be largely influenced by the dollar’s trajectory, with a weaker dollar generally supporting higher gold prices.
