Gold Seeks a Reason for Optimism

Gold has risen in six of the past seven quarters, delivering over 75% total return during this period. After that, all bullion-related assets have been stuck in a long-term range – investors turned to other hedging tools like crypto. It seems the gold market overestimated the risks of a full-scale tariff war.

Political manipulation, unresolved military conflicts, and weak equities are again boosting demand for safe-haven assets. Gold is currently less active than its peer (silver), but continues to receive support on dips and is gradually building interest for new purchases – U.S. inflation data may set the direction through August 1.

Trump’s "letters" proposing 30% tariffs on the EU and Mexico failed to excite gold buyers – the market views them as just "white noise," as does the Fed chair speculation. Meanwhile, capital flows from USD to gold are gaining momentum due to U.S. GDP slowdown and Powell’s hints at a rate cut in 2025 amid subdued inflation expectations.

As August 1 approaches with no major breakthroughs in trade talks, market panic is likely to grow – which will more easily push gold to new highs.

The medium-term trend remains firmly bullish. But if retail sales and/or CPI significantly beat forecasts, we could see renewed strength in the dollar and bond yields, which would exert some pressure on gold prices.

A decisive breakout of the $3,400 zone would be a strong buy signal, but ahead of the psychological $3,500 level, old pending sell orders may trigger a correction. Yet all short-term dips should be viewed as pullbacks within a larger bullish trend.

Bears may attempt to break the $3,300–3,250 area; if they succeed, the $3,000 target could become relevant again. It will be difficult to rebound from that zone without solid fundamental support.

So we act wisely and avoid unnecessary risks.

Profits to y’all!