Tuesday Recap
Gold surged past the $3,430/oz mark on Tuesday, hitting a more than one-month high amid escalating global trade tensions and falling US Treasury yields. Spot gold climbed as high as $3,433.37 intraday and settled at $3,431.64, driven by renewed safe-haven demand. Meanwhile, oil prices continued to decline due to weaker-than-expected progress in trade negotiations and mounting fears over a global economic slowdown.
Gold Highlights
On Tuesday, escalating global trade frictions and a sharp drop in US Treasury yields fueled risk-off sentiment, pushing gold sharply higher. Spot gold surged to an intraday high of $3,433.37 per ounce, the highest since June 16, and ended the day up 1.02% at $3,431.64/oz.
With only a week remaining before the August 1 deadline set by President Trump for trade talks, the market is growing increasingly pessimistic about the chances of a deal. Jim Wyckoff, senior analyst at Kitco Metals, noted:
“Trade-related uncertainty is driving some safe-haven buying. The US is in negotiations on multiple trade fronts, and there are reports suggesting the US and EU are far from reaching an agreement — possibly even facing a breakdown.”
However, trade headlines continue to evolve. As of Wednesday morning (Beijing time), President Trump announced via social media that the US and Japan had reached an agreement: tariffs on Japanese goods will be set at 15%, and Japan will invest $550 billion into the US.
Falling US Treasury yields further boosted gold. The benchmark 10-year yield dropped to 3.328% — the lowest since July 10 — while the 2-year yield also declined. Lower yields reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive.
Gold – Technical Outlook
Gold extended its bullish momentum on Tuesday. After a minor pullback and consolidation near $3,383 during Asian and European hours, it rallied strongly during US trading. Prices broke above the psychological $3,400 mark and closed near session highs above $3,420. The daily candlestick formed a bullish breakout candle above the 5-day moving average, suggesting further upside potential in the near term.
Gold Today’s Outlook:
- Strategy: Focus on buying the dips; sell on strong rallies as a secondary option.
- Resistance (Upper): $3,445–$3,455 zone
- Support (Lower): $3,415–$3,405 zone
Crude Oil Highlights
Oil prices extended losses on Tuesday, pressured by rising concerns over slowing global demand as trade talks falter.
- WTI August Futures fell by $0.99, or 1.47%, to close at $66.21/bbl
- Brent September Futures declined by $0.62, or 0.89%, to settle at $68.59/bbl
With the US-imposed August 1 deadline approaching, market participants are increasingly worried that a worsening trade outlook could dampen economic activity and reduce fuel demand.
Soojin Kim, analyst at MUFG, commented:
“Oil has fallen for a third straight session as US-EU trade tensions mount. The urgency surrounding negotiations is intensifying.”
EU diplomats also indicated that the bloc is considering broader retaliatory measures due to dwindling chances of a compromise with Washington.
A softer US dollar helped limit the decline, as it made oil slightly cheaper for foreign buyers. However, IG Markets analyst Tony Sycamore cautioned:
“While the weaker dollar offers some support, fears surrounding the trade war remain the dominant sentiment, keeping oil under pressure.”
Crude Oil – Technical Outlook
Crude oil continued its bearish trend Tuesday. Prices fluctuated around the $66 mark during Asian and European sessions, remaining under pressure. The US session saw further declines, briefly dropping below $65 before rebounding slightly into a narrow range. The daily candle formed a bearish continuation pattern for the third consecutive session.
Oil – Today’s Outlook
- Strategy: Focus on shorting rebounds; consider long entries only on deep dips.
- Resistance (Upper): $67.5–$68.5 zone
- Support (Lower): $63.5–$62.5 zone
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