Gold Prices Plunge to Near $2,290, Marking Worst Week Since June Amid Trade Tensions and Inflation Fears
Gold prices closed the week near $2,290 per ounce, experiencing their steepest decline since late June as persistent trade policy concerns and unexpectedly strong inflation data weighed heavily on the precious metal’s appeal.
The downward pressure stems from a strengthening dollar, fueled by the tightening of US trade policy. President Donald Trump recently confirmed the implementation of a 10% global baseline tariff, coupled with retaliatory duties potentially reaching 41% on nations lacking trade agreements with the United States. Furthermore, a 40% tariff has been levied on goods suspected of circumventing existing sanctions through third-party countries.
“These tariffs introduce significant uncertainty into the global economic landscape,” noted one analyst. “Investors are reassessing risk, and that’s impacting demand for safe-haven assets like gold.”
Adding to the negative sentiment, recent economic data revealed that both the Consumer Price Index (CPI) and the Producer Price Index (PPI) for June exceeded expectations. This outcome has cast doubt on the Federal Reserve’s anticipated timeline for potential interest rate cuts, previously speculated to begin as early as September. The combined impact of escalating trade tensions and stubbornly high inflation has diminished gold’s traditional role as a hedge against economic uncertainty.
Market participants are now keenly focused on the upcoming US Non-Farm Payrolls (NFP) report for July, anticipating that it will provide crucial insights into the Federal Reserve’s future monetary policy decisions and, consequently, shape short-term expectations for precious metals.
Technical Analysis Points to Further Declines
Technical analysis suggests the current downturn in gold prices may continue. Examining the XAU/USD pair, analysts at RoboForex indicate consolidation within a broad range around $2,298.
H4 Chart Analysis
According to the analysis, a downward breakout today could trigger a test of the $2,255 level, with potential for further declines towards $2,247. This would represent the initial phase of a third wave in the broader downtrend, ultimately targeting a price of $2,055. The Moving Average Convergence Divergence (MACD) indicator supports this bearish outlook, with its signal line remaining below zero and trending downward.
H1 Chart Analysis
The H1 chart reinforces the consolidation pattern near $2,298. A likely drop to $2,263 is anticipated today, potentially followed by a temporary rebound to $2,298 before another descent to $2,255, extending towards $2,247. The Stochastic oscillator corroborates this scenario, displaying a signal line below 80 and a sharp downward trajectory towards 20.
Gold remains under considerable pressure due to ongoing trade-related uncertainties and expectations of a hawkish Federal Reserve. A breach of key support levels could accelerate the decline, while any unexpectedly dovish signals from US economic data may offer temporary respite.
By RoboForex Analytical Department
Disclaimer: Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
