Gold XAU/USD steadies as markets digest trade uncertainty - Middle East Business News and Information
By Daniela Sabin Hathorn, senior market analyst at Capital.com
Gold XAU/USD is showing signs of resilience on Wednesday morning, attempting to resume its broader uptrend after shedding 1.25% on Tuesday. The precious metal continues to navigate the erratic rhythm of global trade talks and the bursts of market optimism that accompany temporary resolutions.
This week's swing in sentiment was driven by the latest twist in U.S.-EU trade tensions. Over the weekend, Donald Trump unexpectedly raised proposed tariffs on the EU from 20% to 50%, effective June 1—only to postpone the increase to July 9 following a call with European Commission President Ursula von der Leyen.
The initial tariff announcement on Friday triggered a classic risk-off reaction: investors sold equities and flocked to traditional safe havens. Gold spiked 1.9%, reaching $3,360. But by Monday morning, markets had flipped back to risk-on mode in response to the postponement, leading gold to reverse those gains.
Gold (XAU/USD) daily chart:
Past performance is not a reliable indicator of future results.
Technically, the 20-day simple moving average (SMA) has offered solid support this past week. A daily close below it ($3,289) would be a bearish signal, potentially exposing the metal to further downside pressure.
For now, the RSI is showing signs of resilience in the bullish trend, suggesting the path of least resistance could remain higher in the short-term. That said, resistance between $3,355 and $3,365 may continue to limit the upside.
Gold traders are trying to figure out how to trade the ongoing trade talks. status as a safe haven remains intact, but its appeal dims whenever risk appetite returns and equities rally—exactly what happened on Monday and Tuesday. By Wednesday, however, the tone had shifted. The thing is, it is not just one trade deal that needs to be sorted out, but several. Right now, China and the EU seem to be the most prominent, and the most likely to possibly sour. Because of this, gold traders aren't completely throwing in the towel, preferring to hold on to some safe haven assets just in case the optimism dries out.
This uncertainty is unlikely to disappear anytime soon. Gold's outlook will remain tied to a fast-changing geopolitical and macroeconomic environment. In the short term, direction is hard to call. In the long run, however, demand remains underpinned by several key drivers: sustained central bank buying, expectations of lower interest rates, and a global shift away from reliance on U.S. economic leadership.
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