Gold (XAU/USD) prices eased slightly on Tuesday as traders locked in profits after Monday’s rally. By 10:00 GMT, spot gold stood at $3,388.83 an ounce, retreating from a high of $3,403 after gaining more than 1.3% in the previous session.
Investors remain cautious as the August 1 deadline for US tariffs fast approaches, with the Trump administration signalling little intention to delay the measures. Washington’s proposed tariffs range from 20% to 50%, targeting major US trading partners. The European Union has reportedly prepared retaliatory tariffs, with talks between the US and EU showing little sign of progress.
Haven demand stayed firm as market nerves intensified over the Federal Reserve’s stance on interest rates. While the dollar cooled after a two-week rally, expectations remained that the Fed would leave rates unchanged at its next meeting, despite political pressure from President Trump for immediate cuts. Speculation has also grown around the Fed’s independence, with reports suggesting Trump may consider firing Fed Chair Jerome Powell.
Investment bank Bernstein argues that Wall Street may be underestimating gold, forecasting a price of $3,700 an ounce by 2026, significantly above the $3,073 consensus. Bernstein’s analysis suggested traditional gold pricing models have lost relevance, pointing instead to government and monetary policy as more accurate indicators.
For now, gold remains supported by geopolitical tensions and monetary uncertainty, even as some traders secure gains from the recent rally.