Gold prices edged higher in early Tuesday trading, partially recovering losses sustained in the previous session. On Monday, the precious metal fell sharply following news of a temporary agreement between China and the United States to significantly reduce tariffs on each other’s imports. The development helped ease fears of a global economic slowdown and boosted risk appetite, prompting increased demand for equities while weighing on haven assets such as gold. Today, that dynamic appears to be on hold as traders adopt a more cautious stance ahead of the release of key US inflation data later in the day. Inflation figures are expected to remain well above the Federal Reserve’s 2% target. Should this be confirmed, it would reinforce expectations that the Fed will refrain from cutting interest rates this summer, with the first reduction now seen as more likely in September.
Meanwhile, positive geopolitical signals—from easing tensions in Ukraine to de-escalation in Kashmir—are dampening demand for gold as a defensive asset. Against this backdrop—marked by signs of a thaw in US-China relations, a stronger dollar, and reduced geopolitical risk—gold prices may continue to face headwinds. However, the underlying sense that this stabilisation may prove temporary will likely offer some ongoing support to bullion.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.