Gold is trading near its 5-week high
Gold prices fell slightly on Tuesday to settle around the level of 3,385 dollars per ounce, but maintained their proximity to the five-week high, which they recorded during the previous session.
This performance comes against the backdrop of prevailing uncertainty in the markets, especially with the approach of the deadline set by US President Donald Trump to impose new tariffs on European imports by August 1.
The impact of trade tensions between the United States and the European Union
Markets are anxiously awaiting the results of trade negotiations between the United States and the European Union this week, as the parties seek to avoid an escalation of the trade war.
Trump has threatened to impose 30% tariffs on most EU exports if negotiations fail.
For its part, Brussels is preparing to impose large-scale countermeasures in the event of a failure to reach an agreement, which could exacerbate volatility in global markets, including the gold market.
The impact of central banks monetary policies
On the monetary policy front, the European Central Bank is expected to keep interest rates unchanged at 2.0% this week, after a series of previous cuts.
The US Federal Reserve is scheduled to issue its decision on monetary policy next week, and Trump is still continuing to put pressure on the Federal Reserve to cut interest rates, which is not expected to be this month due to the positive data released during last week's trading.
Gold retains its appeal as a safe haven
In light of these developments, gold remains an attractive option for investors looking for safe havens, as it is supported by political and trade uncertainty, as well as expectations that global monetary policies will remain relatively lax.
If trade tensions persist, the yellow metal may see further appreciation in the coming period.
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