- Gold price has been struggling to find traction above $3,600 and the calming of trade tariff fears could trigger selling.
Gold price inched up on Friday, gaining $0.4% at the time of writing to trade at $3,355 per ounce at the spot market. The yellow metal previously struggled to find traction above the $3,360 mark and its current momentum signals that trend is likely to continue. Tariff-driven gold demand has cooled down this week as nations affected by high US trade tariffs have not announced retaliatory moves.
A new set of US trade tariffs will kick in on August 1 and could see some of its largest trade partners pay as high as 30% tariffs. However, unlike the initial tariffs announced in May, the new tariffs have not triggered a storm in the markets. Notably, China, which previously faced 145% US tariffs and retaliated with 125%, escalating fears over the trajectory of the global economy and triggering gold price surge to new highs.
The US economy has remained steady despite trade tariff concerns, with the labour market remaining resilient. This has calmed the nerves of investors, reducing the demand for safe haven gold. The latest sign of a strong US economy was expressed in retail sales data released on Thursday, which came out stronger than expected. Nonetheless, gold price could still get some tailwinds depending on the outcome of the ongoing US trade negotiations as the August 1 deadline draws near.
Gold Price Prediction
Gold Price pivots at $3,350 and the upside will prevail if action stays above that level. The metal will likely meet the first resistance at $3,362. However, a stronger momentum could clear that barrier and extend gains to test $3,371.
On the other hand, action below $3,350 will invite the sellers to take control. If that happens, gold price could find its first support at $3,341. The upside narrative will be invalid if the price breaks below that level. Also, an extended control by the sellers could take the action lower and test $3,330.
