TLDR
- Gold price retreated to around $3,333-$3,335 on Monday as President Trump delayed EU tariffs until July 9, reducing safe-haven demand
- Citigroup raised its three-month gold price target to $3,500 per ounce, citing tariff concerns and geopolitical risks
- Gold has risen over 25% this year due to trade tensions and US fiscal concerns following Moody’s credit rating downgrade
- Vietnam’s Prime Minister ordered studies for establishing a regulated gold exchange to prevent smuggling and manipulation
- US markets were closed Monday for Memorial Day holiday, with traders preparing for key economic data releases this week
Gold prices fell on Monday as President Donald Trump announced a delay in planned tariffs against the European Union, reducing investor demand for the precious metal as a safe haven. The price dropped to around $3,333-$3,335 per ounce during European trading hours.
Trump said on Sunday through his Truth Social platform that he would extend the deadline for EU tariffs until July 9. The original plan called for 50% tariffs on European goods. The delay followed a phone call between Trump and European Commission President Ursula Von Der Leyen on Sunday.
The tariff postponement gave markets some relief from trade war concerns. However, analysts warn the delay does not represent a fundamental change in Trump’s trade policy. Josh Gilbert from eToro said the pause was temporary and more concrete agreements were needed to confirm a shift toward negotiation.
Gold had climbed almost 5% last week before Monday’s retreat. The precious metal has gained more than 25% this year as trade tensions escalated. Current prices sit about $165 below the all-time high reached last month.
US Fiscal Concerns Support Gold Demand
Despite the tariff delay, underlying support for gold remains strong due to US government debt concerns. Moody’s Ratings recently stripped the United States of its top credit rating. Investors worry about the country’s fiscal position as Trump’s tax bill moves through Congress.
The tax legislation passed the House last week and now heads to the Senate for debate. Market participants fear the bill will increase both the US deficit and debt levels. These fiscal concerns continue to underpin demand for gold as a store of value.
Citigroup raised its three-month price target for gold to $3,500 per ounce. The bank cited tariff-related concerns, high geopolitical risks, and solid economic growth in China and India. Citi analysts said “Gold demand is firing on all cylinders” in their research note.
International Gold Market Developments
Vietnam’s government is exploring new gold market regulations. Prime Minister Pham Minh Chinh asked the central bank and finance ministry to study creating a regulated gold exchange. The goal is to enable transparent public trading while preventing smuggling and market manipulation.
The US dollar also weakened on Monday, extending Friday’s losses. Speculative traders have remained bearish on the dollar this year due to mounting US fiscal concerns. CFTC data showed traders trimmed their bearish dollar positions to $12.4 billion in the week ending May 20 from $16.5 billion the previous week.
US markets were closed Monday for the Memorial Day holiday. Traders are preparing for key economic data releases this week including durable goods sales, home sales, and consumer sentiment measures.
Gold’s technical outlook shows resistance at $3,386 and $3,415, with potential for new highs at $3,500. Support levels exist at $3,307 and $3,258 if prices decline further. The current pullback appears temporary given ongoing trade and fiscal uncertainties.
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