Trump’s tariffs, ranging between 25% and 40% from August 1, threaten to revive trade tensions that could weigh on global growth. China has warned it will retaliate against nations aligning with U.S. supply chain strategies, adding geopolitical risk but failing so far to trigger a gold breakout.

UBS analyst Giovanni Staunovo noted that the tariff extensions are gold-negative while potential damage to Asian growth prospects remains gold-supportive, leaving traders with conflicting signals.

Federal Reserve Minutes Could Be the Trigger Traders Need

The market is now eyeing the Fed’s June meeting minutes on Wednesday for clues on interest rate policy, with traders searching for any dovish tilt that could weaken the dollar and lower yields, providing room for gold to rally.

Currently, Trump’s tariffs have fueled inflation concerns that complicate the Fed’s rate path, but without clear signals on policy easing, gold remains pinned in its current zone.

Treasury Yields and Gold Prices Remain Entangled

Rising Treasury yields, driven by renewed tariff threats, are creating headwinds for gold prices as the cost of holding bullion increases relative to yield-bearing assets. The 2-year yield remains stable near 3.907%, while long-end rates are inching up, adding pressure on gold unless inflation fears escalate significantly.

Gold Prices Forecast: Range Holds Until Catalyst Arrives