On Tuesday 15th of July, gold prices edged lower as investors turned their attention to possible U.S. tariff changes and waited for the next big inflation indicator.
While the metal dipped 0.4% to $3,329.11 per ounce, many experts suggest this isn’t the end of gold’s bullish story.
The decline in gold prices comes at a time of heightened geopolitical noise. Over the weekend, former President Donald Trump threatened a new wave of tariffs, up to 30%, targeting imports from the European Union and Mexico.
While these are just threats for now, traders are watching closely.
Why? Because tariff hikes often stir up uncertainty, which tends to boost gold prices, not suppress them.
But this time around, the market is treading water. According to Peter Grant of Zaner Metals, the gold market is still “well within the range that has been in place since the middle of May.” Investors are cautious, but the underlying fundamentals remain strong.
The U.S. Consumer Price Index (CPI) rose by 0.3% in June, matching expectations. It was the biggest monthly gain since January, hinting that inflation hasn’t cooled off just yet. Despite this, gold didn’t rally. In fact, it slipped.
But why the disconnect?
The dollar rose 0.5%, making gold more expensive for buyers using other currencies. And when the dollar strengthens, gold often takes a hit.
But here’s the twist: Even with inflation inching up, the market still believes the Federal Reserve will cut interest rates by September. Lower rates typically lift gold, as it becomes more attractive compared to yield-bearing assets like bonds.
So why isn’t gold responding more strongly?
Tai Wong, an independent metals trader, puts it plainly:
“Honestly, gold should be perkier… we need a new driver to push gold back up past $3,400.”
The next big moment for gold comes on Wednesday, when the U.S. releases its Producer Price Index (PPI), another key gauge of inflation. If this number surprises, expect ripples in gold prices.
While gold struggled, silver came close to stealing the show. Prices recently hit a 14-year high, briefly touching levels not seen since September 2011. Though it dipped 1.2% on Tuesday to $37.69, analysts remain bullish.
Peter Grant said he’s targeting $41.61/oz for silver in the short term, and views any dip as a “buying opportunity.”
Gold is at $3,329.11/oz (-0.4%), Silver at $37.69/oz (-1.2%), then Platinum $1,361.46/oz (-0.2%), and Palladium: $1,204.53/oz (+1%).
If you’re following gold closely, whether as an investor, trader, or enthusiast, here’s what to keep in mind:
Tariffs could fuel volatility; if talks escalate, gold may surge. However, rate cuts remain the real driver; a confirmed September cut would likely push gold above $3,400.
Inflation is sticky, not surging, and that is keeping gold in check for now.
Silver is gaining momentum, and it could be the dark horse in the precious metals race.
Despite the dip, gold continues to play its traditional role as a hedge against uncertainty and economic instability. With central banks hinting at future rate cuts and geopolitical tensions simmering, the long-term bullish case for gold is very much alive.
But short term? It’s all about the next data point and the next political headline.
