Gold Steadies After Sharp Drop as Trump Delays EU Tariffs

Gold prices recovered modestly Wednesday morning following Tuesday’s steep decline, with traders buying the dip while remaining cautious about trade developments.

Spot gold traded at $3,308.99 per ounce, gaining 0.3% after dropping 1% in the previous session. US gold futures climbed 0.2% to $3,308.30, partially erasing Tuesday’s losses.

President Trump’s decision to postpone 50% tariffs on European Union goods until July 9 dominated market sentiment. The delay from the original June 1 deadline provided relief to global markets and reduced safe-haven demand for the precious metal.

Trump announced the postponement following discussions with European Commission President Ursula von der Leyen, giving both sides time for trade negotiations.

The Memorial Day holiday Monday created thin trading conditions that amplified price movements. Gold swung between $3,324 and $3,358 during the holiday session with reduced liquidity from closed New York and London markets.

Tuesday’s decline broke gold below the psychologically important $3,300 level before Wednesday’s recovery. Technical analysis reveals gold testing critical support near $3,295, where the 21-day moving average converges with Fibonacci retracement levels.

The 14-day RSI holds above the midline, suggesting short-term technical conditions remain favorable for buyers. Key resistance appears at $3,365-$3,371, with a breakthrough potentially targeting $3,400 and ultimately $3,435.

Market participants now await Friday’s US Core Personal Consumption Expenditures inflation data, the Federal Reserve‘s preferred inflation gauge.

The PCE reading could influence expectations for future interest rate cuts after the Fed maintained rates at 4.25%-4.50% since December. Money markets currently price in a 50 basis point cut by year-end.

Federal Reserve Bank of Minneapolis President Neel Kashkari stated Tuesday that rates should remain steady until tariff impacts on inflation become clearer.

Recent US economic data presented mixed signals, with consumer confidence improving in May while durable goods orders declined. Asian demand continues supporting gold fundamentally.

China’s net gold imports through Hong Kong surged in April, while gold imports to Switzerland from the US reached the highest monthly level since 2012. Central banks worldwide maintain their accumulation patterns despite price volatility.

Tim Waterer from KCM Trade noted that gold’s decline below $3,300 attracted buyers, though overall market optimism from reduced US-EU trade tensions limits upward momentum.

Support in the $3,250-$3,280 range could position gold for another attempt toward $3,400 if risk appetite diminishes. Indian gold markets remained stable with 24-karat gold at ₹97,480 per 10 grams.

Analysts expect trading ranges between ₹95,000-₹96,500 as investors balance economic uncertainties against improving trade relations. The precious metal maintains its appeal as a hedge against policy uncertainty and geopolitical risks.

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