Gold is moving back up towards record highs after another week of turbulence on the macro front, which is driving traders back into the safe haven.
Trade tariffs continue to influence the gold price, with Trump slapping a 50% tariff on India despite making deals with most other major economies.
The gold price was trading a whisker below $3,400 at the time of writing on Friday, having rebounded from lows around $3,280 at the start of the week.
“Gold posted an impressive rebound during the first week of August, approaching the key $3,400/oz level. This rally was not merely driven by technical factors, but rather supported by a confluence of macroeconomic risks, escalating geopolitical tensions, intensifying trade pressures, and growing expectations that global monetary policy may begin to ease,” said Linh Tran, Market Analyst at XS.com in a note.
“On the trade front, the current environment reflects a stark dichotomy. On one hand, the U.S. has made meaningful progress in bilateral negotiations with major economies such as Japan, the EU, and the UK—somewhat calming investor sentiment. On the other hand, unresolved risks remain.
“Most notably, President Trump unexpectedly imposed a tariff of up to 50% on Indian garment imports—25% effective immediately and another 25% to take effect on August 28—as a punitive measure for India’s continued oil purchases from Russia despite international sanctions.”