Gold edges down after U.S. President Donald Trump pushes back the EU tariff deadline to July 9. This decision comes after a recent call between Trump and European Commission President Ursula Von Der Leyen. Markets responded by turning risk-on, causing gold (XAU/USD) prices to slip towards $3,325, partially erasing last Friday’s gains. Despite this dip, gold’s appeal as a safe-haven asset remains robust due to persistent fiscal concerns in the United States.
Key Points for Gold Price
Market experts urge caution as trade talks remain uncertain
Trump postpones EU tariffs to July 9, giving a short break in trade tensions.
Gold edges down towards $3,325 but retain strong safe-haven demand
US fiscal worries continue to support gold’s long-term outlook
Technical resistance at $3,386 and support near $3,307 levels
Market Context: How Trump’s Tariff Extension Affects Gold Prices
The extension of the tariff deadline gives the European Union extra time to negotiate a possible trade deal with the United States. This move follows Trump’s previous threat to impose 50% tariffs on EU goods, which spooked markets initially. Additionally, Apple Inc could face 25% tariffs if it doesn’t move iPhone production to the US. However, the delay shows a softer trade approach, lowering gold’s short-term safe-haven demand.
Despite this, investors remain wary of the US government’s growing fiscal deficits. The recent passage of Trump’s tax bill in the House, which is now moving to the Senate, has raised fears about further increasing the nation’s debt. These fiscal concerns sustain gold’s status as a hedge against economic uncertainty and currency weakness.
Josh Gilbert, market analyst at eToro, highlighted that these tariff pauses do not indicate a permanent policy shift. He said, “Pauses are fine for now, but we need real deals to prove Trump is willing to negotiate.”
Technical Insights: Key Gold Price Levels and Support to Watch
Gold’s technical outlook remains cautiously optimistic amid the tariff extension. The first resistance level to watch is $3,386 (R1). If prices break through this point, the next resistance at $3,415 (R2) could pave the way toward testing the $3,440 level. A breakthrough above this might even lead to new all-time highs around $3,500.
On the downside, solid support lies at the $3,307 mark (S1), protecting the important $3,300 price floor. Additional supports include $3,258 (S2) and a key technical level near $3,245, which closely aligns with the S2 support. These levels will be crucial if the market sentiment shifts back toward risk aversion.
Expert Opinions and Broader Market Signals Impacting Gold Price
Besides the US and EU trade developments, other global factors are influencing gold. Vietnam’s Prime Minister Pham Minh Chinh has requested his government to explore establishing a regulated gold exchange. This move aims to improve transparency in gold trading and reduce smuggling risks.
Meanwhile, gold edges down as the US Dollar continues to weaken, extending losses from last week. Speculative traders have reduced their bearish bets on the dollar, reflecting fading enthusiasm for the world’s reserve currency amid growing fiscal worries.
Conclusion: Gold’s Outlook Amid Trade and Fiscal Uncertainty
Gold’s small dip following Trump’s tariff extension reflects short-term relief in trade tensions but does not mark an end to the rally. Persistent concerns over US fiscal health and global economic uncertainties continue to underpin gold’s safe-haven appeal. Investors should watch key technical levels carefully and stay updated on trade negotiations, which remain unpredictable.
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FAQs About Gold Edges Down as Trump Extends Deadline for EU Tariffs
Q1: Why did gold edge down recently?
Gold edged down after President Trump delayed the EU tariffs deadline to July 9, easing short-term trade tensions.
Q2: How does the tariff delay affect gold prices?
The tariff delay lowers immediate safe-haven demand for gold as trade worries ease temporarily.
Q3: What are the key support and resistance levels for gold?
Key resistance levels are $3,386 and $3,415, while support is strong near $3,307 and $3,258.
Q4: Why is gold still considered a safe-haven despite the dip?
Gold remains a safe-haven due to ongoing US fiscal concerns and global economic uncertainty.
Q5: What impact does the weakening US Dollar have on gold?
A weaker US Dollar typically supports higher gold prices as gold becomes cheaper for buyers holding other currencies.
Q6: Are there any expert opinions on the tariff extension?
Experts warn that tariff delays don’t guarantee permanent policy changes without actual trade agreements.
