Gold rebounds on safe-haven flows ahead of August 1 tariff deadline

• Gold climbs back above $3,300 after hitting a one-month low on Wednesday.
• Safe-haven demand picks up as markets brace for the final US tariff announcements ahead of the August 1 deadline.
• The technical setup remains range-bound between $3,250 and $3,450 with weak momentum.

Gold (XAU/USD) rebounds sharply on Thursday after falling to a one-month low of $3,268 on Wednesday, pressured by stronger-than-expected US data and the Federal Reserve’s (Fed) decision to keep interest rates unchanged. However, safe-haven demand has since resurfaced, with buyers stepping in to drive a swift recovery.

As of European trading hours, the metal is hovering near $3,306, up nearly 0.95% on the day. The rebound is supported by rising trade tensions ahead of the August 1 deadline and a modest pullback in the US Dollar (USD) from a two-month high, helping the metal reclaim the key $3,300 level.

US President Donald Trump is expected to announce final tariffs on several countries that have yet to reach a deal later on Thursday. The tariffs are set to take effect Friday, August 1, keeping market sentiment fragile.

On Wednesday, President Trump unveiled a series of aggressive trade measures, starting with a 25% tariff on all Indian imports, citing national security concerns over India’s growing defense and energy ties with Russia.

He also raised tariffs on Brazilian imports by 40%, bringing the total effective duty to 50%, with selective exemptions on products such as orange juice, fertilizers, and aircraft. Additionally, a 50% tariff was introduced on copper-based products, including pipes and electrical wiring, though raw copper, cathodes, and concentrates were excluded.

Amid renewed tariff threats, some optimism emerged on Wednesday as the United States (US) and South Korea finalized a trade agreement just before the deadline.

Under the deal, the US will impose a 15% tariff on South Korean imports, significantly lower than the previously threatened 25%. In return, South Korea pledged $350 billion in investments in America. So far, the US has finalized trade framework deals with the European Union (EU) and Japan, both of which include strategic investment commitments and tariff alignment across key sectors.

In addition, bilateral agreements have been reached with the United Kingdom, Indonesia, Vietnam, and the Philippines. Meanwhile, a 90-day trade truce with China is set to expire on August 12, with no agreement or extension yet announced.

Looking ahead, traders will shift focus to key US economic data due later on Thursday at 12:30 GMT. The calendar features the Core Personal Consumption Expenditures (PCE) Price Index for June – the Federal Reserve’s preferred inflation gauge – along with the headline PCE Price Index and Initial Jobless Claims.

Market movers: Fed pause, weak yields keep Gold anchored

• The Fed kept interest rates steady at 4.25%-4.50% on Wednesday, with two FOMC members dissenting in favor of a cut. Chair Jerome Powell struck a cautious tone in the post-meeting press conference, signaling that it’s “too soon” to consider rate reductions amid lingering inflation pressures, especially those linked to rising tariffs.
• The yield on the 10-year US Treasury hovers near 4.36% on Thursday, while the 30-year yield stands around 4.88%, both slipping nearly 30 basis points from Wednesday’s post-Fed highs. The pullback comes despite the Fed’s hawkish stance, reflecting a cooling in rate-cut expectations as markets reassess the policy outlook.
• Fed Chair Jerome Powell confirmed that no decision has been made regarding a potential rate cut in September, reinforcing the central bank’s “wait-and-see” stance. His cautious remarks triggered a sharp repricing in market expectations: the probability of a September rate cut dropped to 37.2%, down from around 65% earlier in the week, according to data from the CME FedWatch Tool.
• According to a latest report published by World Gold Council (WGC) on July 31, Gold demand (including OTC investment) rose 3% YoY to 1,249 tonnes. In value terms, total gold demand jumped 45% YoY to $132 billion, driven by safe-haven flows into gold ETFs and physical investment. This marked the strongest first half for gold investment since 2020.
• Gold-backed ETFs saw 170 tonnes of net inflows in Q2, adding to 227 tonnes in Q1, making H1 2025 the strongest six-month period since the record-breaking H1 2020. Robust flows came from all major regions, especially China and North America, as uncertainty over US trade policy and geopolitical risks kept institutional demand elevated, the WGC report added.
• Central banks added 166 tonnes of Gold to their reserves in Q2, down 33% from Q1, but still 41% above the 2010-2021 average. Despite the slowdown, the World Gold Council notes that 95% of surveyed central banks expect global reserves to rise over the next year, reinforcing Gold’s role as a strategic reserve asset.

Technical analysis: XAU/USD consolidates between $3,250-$3,450 range as momentum weakens

On the daily chart, XAU/USD is trading in a sideways range after reaching an all-time high of $3,500.14 on April 22. Since then, prices have been consolidating between $3,250 and $3,450, showing no strong directional trend.

The $3,250 level remains the first key support, which has previously acted as a strong demand zone. A breakdown below this could expose the next support around $3,150. On the upside, immediate resistance is seen near $3,350, which lines up with the middle Bollinger Band and also serves as the 20-day Simple Moving Average (SMA).

The Relative Strength Index (RSI) is currently at 44, reflecting neutral to mildly bearish momentum, with further room to fall before entering oversold territory. Meanwhile, the Average Directional Index (ADX) is extremely low at 11.28, suggesting a weak trend and overall market indecision.

This implies Gold may continue to trade range-bound in the near term unless a decisive breakout above $3,350 or a breakdown below $3,250 takes place.