Gold Under Pressure Below $3,400, Market Sentiment Vulnerable to Change
Gold prices weakened slightly on Tuesday (July 22nd), despite strengthening for two consecutive days. The precious metal sold below the psychological level of $3,400 per ounce, but still has the potential to rise again. Current market sentiment is driven by the August 1 deadline set by US President Donald Trump to impose new tariffs on the European Union, which could trigger increased demand for safe-haven assets like gold.
Trade negotiations between the US and the EU continue to pose tight constraints for investors. Trump has threatened to impose 30% tariffs on EU exports if a deal is not reached by early next month. Meanwhile, EU diplomats have indicated that the bloc is considering retaliatory measures against the US, signaling a potential escalation of the trade conflict. This uncertainty has prompted investors to seek hedges amid global volatility.
In addition to tariff concerns, the market has also been shaken by issues surrounding the independence of the Federal Reserve. US Treasury Secretary Scott Bessent stated that the Fed's mandate is expanding into non-policy areas, and he is conducting a comprehensive review of the central bank's role. This statement added to market concerns about political interference in US monetary policy.
Pressure on the Fed increased after President Trump again criticized Chairman Jerome Powell for his reluctance to lower interest rates. Speculation about Powell's possible dismissal also emerged, raising concerns about monetary policy amid a global slowdown. In such a situation, gold remains a sought-after asset due to its role as a hedge against market and geopolitical risks.
Source: Newsmaker.id
