Gold erased its earlier gains on Tuesday, as the bullish trendline has flipped from support to resistance, where the price may resume its downward path, heading towards the monthly pivot point at $3332. A stability below the pivot point could dump prices further towards the second weekly support level depicted at $3320, which is very close to the golden 61.8 Fibonacci Retracement level, then the strong support at $3310.
However, shall gold rebound and trade above the trendline, it could rise once again to retest $3359, which has turned from support into resistance. Reclaiming the weekly pivot point is pivotal for gold to resume its recent upward march, targeting $3397 then $3423.
On the economic front, markets experienced relative stability today, especially following the announcement by President Donald Trump that U.S. imports of gold will not be subject to additional tariffs, stating, “There will be no tariffs on gold.” This declaration came after the U.S. Customs issued a notice indicating that gold bars specifically weighing one kilogram and 100 ounces (approximately 2.8 kilograms) would be subject to tariffs, which had caused gold futures prices to surge to record levels during Friday’s trading session.
In addition, Trump signed an executive order extending the trade truce with China for 90 days. This extension comes as retailers in the country prepare to increase their inventories ahead of the year-end holiday season.
Concerning economic data, the key focus this focus will be on U.S. Consumer Price Index (CPI) inflation indicator for July, scheduled for release at 8:30 AM Eastern Time Tuesday. The index is expected to show a faster annual increase compared to June, with the headline CPI forecasted to rise by 2.8% year-over-year in July, slightly up from a 2.7% increase in June.
In addition, several Federal Reserve officials are scheduled to make significant remarks today, including Tom Barkin president of the Federal Reserve Bank of Richmond and Jeff Schmid Barkin, president of the Federal Reserve Bank of Kansas City.
It is noteworthy that the U.S. administration is searching for a successor to Federal Reserve Chair Jerome Powell, who has faced repeated criticism from President Trump since the beginning of his second term in January, particularly over interest rate policies.
As the week closes, markets will also focus on important U.S. data such as retail sales, which are expected to increase by 0.5% on a monthly basis in July, following a 0.6% growth rate reported in the previous month.