The gold market has exhibited volatile movements in recent sessions, with prices retreating from a five-week high on Tuesday (22nd) as investors engaged in profit-taking. The precious metal had earlier touched $3,396.10 per ounce before the pullback, prompting cautious market sentiment ahead of the August 1 tariff deadline that's injecting fresh uncertainty into global markets.

Despite the correction, spot gold prices remained resilient at around $3,385.20 per ounce, with analysts noting strong underlying support. Jigar Trivedi , senior analyst at Reliance Securities, observed: "While we're seeing some downward pressure, the bullish case for gold hasn't evaporated ahead of the negotiation deadline. We expect strong resistance near $3,420, with $3,350 serving as a crucial support level."

Dollar Strength and Trade Tensions Weigh on Gold

The U.S. dollar's firm performance has created headwinds for gold, as the greenback's strength typically reduces the appeal of dollar-denominated commodities for international buyers. Market unease intensified after EU diplomats signaled diminishing prospects for a comprehensive trade deal with the United States. President Trump has threatened to impose tariffs as high as 30% on EU imports if no agreement is reached by August 1.

Fed Meeting and Rate Outlook

Market participants are closely monitoring next week's Federal Reserve policy meeting, where officials are widely expected to maintain current interest rates. However, speculation about potential rate cuts continues to influence gold's positioning. Historical patterns show gold tends to perform well in low-rate environments and during periods of geopolitical and economic turbulence.

As the August 1 deadline approaches, investors are advised to maintain flexible strategies to navigate market volatility. Whether holding gold positions or seeking new opportunities, understanding global market dynamics will prove crucial for responding effectively to emerging challenges.