GOLD Analysis
Gold Pulls Back to $3,300 as Trade Calms and Tariff Threats Persist
Highlights
- Gold retreats to $3,300/oz as Trump delays 50% EU tariffs but maintains threats on Apple, easing immediate safe-haven demand.
- ECB and Bundesbank speeches alongside Memorial Day–thin U.S. markets set the stage for limited liquidity and headline-driven moves.
- Key technical levels: support at $3,260 and $3,300; resistance at $3,335—sell on spikes to $3,305 with stops above $3,345.
Overview:
Gold prices eased back toward $3,300 per ounce after climbing nearly 5% the previous week on a wave of economic and political uncertainty. The metal’s recent surge had been driven by heightened safe-haven demand, fueled by speculation over President Trump’s expansive new tax-cut plan—which Congressional analysts estimate could add roughly $3 trillion to the U.S. deficit over the coming decade—and broader apprehension about U.S. fiscal sustainability.
This week, however, markets took comfort from Trump’s announcement that the planned 50% tariff on European imports would be postponed until July 9, suggesting at least a temporary thaw in trade tensions. The delay implied room for negotiations with the European Union, even as the President’s ongoing threat to impose 25% tariffs on Apple unless it relocates iPhone production to the United States continued to underscore the unpredictable nature of U.S. trade policy.
Compounding gold’s complex backdrop, U.S. financial markets will observe Memorial Day, leaving the Treasury market closed and liquidity in other asset classes subdued. Across the Atlantic, speeches by Bundesbank President Nagel and ECB President Lagarde are slated to provide fresh color on Europe’s growth and inflation outlook, factors that often ripple through currency and commodity markets. A firmer euro or hawkish ECB tone could further temper dollar weakness—and by extension, capping gold’s upside.
From a technical vantage, gold’s break below $3,340 has opened the door to a test of support at $3,310, near today’s $3,300 midpoint. Should that level hold, a rebound back toward $3,370 remains plausible; however, a decisive drop below $3,300 could expose deeper support near $3,240, last week’s consolidation zone.
Trade Strategy
Given the high-volatility environment and shifting headline risks, a sell-on-rallies approach may be prudent. Traders can consider short positions near $3,305, targeting $3,260, with a protective stop above $3,345 to shield against sudden safe-haven spikes if trade or fiscal worries re-intensify.