Gold prices have steadied after a slight dip on Monday (Tuesday AEST), following comments from US President Donald Trump indicating a willingness to engage in further tariff negotiations with major economies, including the European Union. Bullion was trading near $US3347 per ounce, recovering from a 0.4 per cent decline in the previous session. Trump’s openness to trade discussions has softened safe-haven demand, despite his continued insistence that tariff rate letters constitute ‘the deals’ for trade partners.
The precious metal has seen substantial gains this year, climbing over 25 per cent and reaching a record high above $US3500 an ounce in April. This surge was largely fuelled by the US’s assertive trade policies, which heightened gold’s attractiveness as a store of value amidst global economic uncertainties. However, this rally has paused over the last three months.
Investors are currently awaiting more clarity on the direction of the new trade system. There are signs that investors are hesitant to invest in gold at such high prices. Fawad Razaqzada, a market analyst at City Index, suggested that a breakdown in trade talks before August could lead to a retest or breach of previous highs for bullion.
‘For now, the market seems firmly in wait-and-see mode, keeping the gold forecast leaning cautiously bullish,’ Razaqzada stated. The market’s direction hinges significantly on the progression and outcomes of future trade negotiations.
