Inflation Concerns and New Tariffs Push Gold Prices Higher Again
Gold prices (XAU/USD) rose to a three-week high of around $3,370 during the European session on Monday, extending their upward trend to four consecutive days. Bullish sentiment was driven by concerns about escalating global trade tensions, particularly after the US officially imposed 30% tariffs on the European Union and Mexico.
The increase in global risk has fueled demand for safe-haven assets like gold. The market views trade tensions as a major catalyst for gold's rally, especially since the US's move was announced directly by President Trump after failing to reach a trade agreement during the 90-day negotiation period.
The European Union, through President Ursula von der Leyen, stated that the door to dialogue remains open until the August 1 deadline, but reiterated the EU's readiness to retaliate if necessary. Meanwhile, the US has also imposed additional tariffs on 20 other countries, including Japan and Canada.
Market focus now shifts to US inflation (CPI) data, which will be released on Tuesday. This data is crucial as it can shape expectations regarding the direction of the Fed's interest rate. Higher-than-expected inflation could put pressure on gold prices in the short term, as it would strengthen the case for longer-term high interest rates.
However, so far, gold has held strong amid geopolitical threats and global policy uncertainty. Technically, the price is now targeting key resistance at $3,385, with the next psychological target at $3,400 if buying pressure persists.
Source: (ayu-newsmaker)
