GOLD Analysis
Afternoon: Gold Rebounds Toward $3,340 on Trade-War Nuances and Safe-Haven Demand
Highlights:
- Scott Bessent stresses tariffs must fall before trade talks can advance, underpinning safe-haven gold flows.
- Trump spares automakers from new duties, but broad tariffs remain, keeping gold bids alive.
- Key data—German Ifo, U.S. jobless claims, durable goods, home sales—will shape Fed outlook and gold’s next leg.
Overview:
Overcoming a two-day pullback, gold rallied back toward the $3,340 per ounce mark as persistent concerns about the U.S.-China trade dispute continued to drive safe-haven flows. The rebound was underpinned by remarks from U.S. Treasury Secretary Scott Bessent, who cautioned that steep tariffs on Chinese goods would need to be eased before meaningful progress in trade talks could resume. While Bessent stopped short of promising unilateral tariff reductions, his acknowledgment of the unsustainability of current duties lent renewed urgency to the expectation that U.S. and Chinese negotiators will seek compromise to avoid further economic strain.
Simultaneously, President Trump moved to shelter U.S. automakers from proposed tariff increases after weeks of intense lobbying by industry leaders. This carve-out for the auto sector offered a glimmer of détente, easing some of the broader trade-war jitters that had weighed on market sentiment. However, traders remain wary: broad-based tariffs remain firmly in place, and the path to a comprehensive deal still appears fraught with political and logistical hurdles.
On the fundamental front, gold’s allure is buoyed by the prospect of ongoing policy stimulus from major central banks, which tends to depress real yields and improve gold’s relative appeal. Moreover, robust demand from gold-backed ETFs and continued purchases by sovereign wealth funds have provided a structural floor under prices.
Looking ahead, market participants will scrutinize a busy U.S. economic calendar for fresh directional cues. Wednesday’s release of German Ifo Business Climate data will shed light on Euro-zone growth prospects, while U.S. reports on Unemployment Claims, Core and Total Durable Goods Orders, and Existing Home Sales will inform Fed rate-outlook expectations. Should these data affirm a slowing growth trajectory or signal lower real yields, gold may extend its advance.
From a technical standpoint, immediate support for spot gold lies at $3,310 per ounce, with resistance near $3,375. In India’s MCX market, traders can look for buying opportunities around ₹94,200 with an eye toward ₹95,400, maintaining a protective stop below ₹94,200 to guard against renewed downside. For those seeking tactical entries, a buy-on-dip approach around $3,330, targeting $3,365, offers a disciplined way to engage the metal amid ongoing volatility.
Trading Strategy
- Action: Buy on dips around $3,330, targeting $3,365; place a stop-loss below $3,310 to protect against a renewed breakout.