Gold’s golden run just hit a speed bump. After flirting with multi-week highs near $3,440, XAU/USD slipped below $3,380 per ounce on Thursday, extending its previous session’s 1% slide. One reason for this is the dose of optimism that global trade tensions might finally ease.
The catalyst came from Washington and Brussels. Reports suggest the EU and U.S. are close to a deal, one that would impose a 15% tariff on EU goods instead of the crushing 30% scheduled for August 1. That framework mirrors the U.S.-Japan deal inked earlier this week. The market loves progress, and that means less fear, less safe-haven hoarding.
Here's what’s driving the metal this week.
1. Risk-On Vibes Still Pressuring Gold
US and EU close in on 15% tariff deal
Agreement would mirror accord with Japan and head off Donald Trump’s threat to raise duties to 30% from August 1
ft.com/content/460b77…
— #Giovanni Staunovo🛢 (#@staunovo)
4:37 PM • Jul 23, 2025
The optimism over global trade progress hasn’t faded. A U.S.-Japan tariff deal is already signed, and the EU is racing to finalize its 15% tariff agreement before Trump’s August deadline for steeper 30% levies. Risk appetite remains elevated, pulling some funds out of safe-havens like gold.
But the game isn’t over: South Korea and India are still staring down tariff threats up to 50%. That lingering uncertainty is helping gold avoid a full-blown collapse.
2. The Fed Drama
All eyes are on the Federal Reserve meeting next week. Rates are expected to stay on hold, but October cuts remain on the table. Meanwhile, political heat is rising, Trump is still calling for Powell’s resignation, and Treasury Secretary Scott Bessent is questioning the Fed’s independence. This could mean, that a macro stage is set for volatility, and that’s gold’s safety net.
3. Dollar Weakness Cushions the Blow
Despite gold’s recent slip, the U.S. Dollar Index (DXY) remains on the back foot, trading near multi-week lows. Mixed signals on rate policy and the Fed’s credibility crisis are weighing on the greenback. This dollar softness is cushioning gold’s decline, though a hawkish surprise next week could flip the narrative fast.
4. Technicals: $3,383 and $3,330 Key Levels
Here’s where it gets interesting. Gold is currently holding above $3,383, a critical short-term pivot. A break below this zone opens the door to $3,330, followed by deeper support near $3,300.
On the upside, bulls need to reclaim $3,426 to reignite momentum toward $3,452 and possibly retest the $3,500 all-time high. Trend bias? Still bullish, but momentum is cooling, and buyers can’t afford complacency.
5. Macro Noise Isn’t Done
Even with trade headlines looking upbeat, the backdrop is still messy. Trump’s tariff threats on South Korea and India persist, and Fed policy uncertainty is a wild card. Add in upcoming PMI data and U.S. housing numbers, and you’ve got a recipe for choppy price action. Gold traders, stay alert, volatility isn’t going away.
Here’s the Takeaway:
Gold’s pullback to $3,383 isn’t a bearish trend shift, yet. The $3,330–$3,300 zone is the real line in the sand for bulls. Hold it, and the path back to $3,426 and beyond stays alive. Lose it, and sellers may finally take control. Remember to put our eyes on Powell next week.