Gold prices dipped during early European trading as risk appetite was buoyed by the US administration’s announcement to delay the imposition of 50% tariffs on European imports until 9 July. The move diverted flows away from the haven precious metal. At the same time, a modest rebound in the US dollar added to the downward pressure on bullion, which slipped below the $3,300 mark. Despite this pullback, gold remains close to that psychologically significant level, and investors may hesitate to place meaningful bets on further declines. Tariff uncertainty persists, and concerns over the US fiscal outlook remain elevated — particularly as the Senate deliberates on a tax-cutting bill that could add an estimated $4 trillion to the national debt. These factors will likely continue supporting gold, along with ongoing geopolitical tensions in Ukraine and the Middle East. Additionally, traders are pricing in at least two 25 basis point interest rate cuts by the Federal Reserve this year, which could weigh on the dollar and provide a tailwind for gold, given the inverse correlation between the two assets. Against this backdrop, bullion is unlikely to fall significantly below the $3,300 level, with the path of least resistance still pointing to the upside.
Ricardo Evangelista – Director, ActivTrades
Source: ActivTrader
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