Gold forecast: All about tariffs again in week ahead

Gold finished 1.9% higher on the week with a small gain on Friday, ending a two-week losing run. Yet the bigger picture hasn’t changed much. The precious metal has been consolidating its big gains in recent months, after the bullish momentum faded amid trade optimism and more recently easing of geopolitical tensions concerning Israel’s conflict with Iran. However, it remains to be seen whether a new breakout or indeed a breakdown will take place in the week ahead, when the macro calendar is light, but we have the July 9 reciprocal tariff deadline looming, which could impact the near-term gold forecast depending on what happens.

 

Tariff deadline looming on July 9

 

Gold has now posted gains in six of the past seven quarters, delivering more than 75% return over that span. Yet, after hitting a record high of $3,500 in April, gold spent much of Q2 consolidating near its peak levels, showing some signs of exhaustion. Unless trade uncertainty rises sharply again with the July 9 deadline approaching, the metal may find it difficult to surpass that level by a significant margin, especially as the Middle East tensions have died down and US stock averages have hit new record highs. You can read more on the tariff deadline and what it means for markets here.

 

Gold’s stellar start in 2025 may give way to a cooling period in h2

 

As I have written in our H2 2025 gold forecast, the metal’s remarkable performance in the first half of 2025 is likely to transition into a phase of consolidation in the latter half of the year, as demand for safe-haven assets subsides. However, in the short-term, US trade dynamics and stock market volatility will continue to play a pivotal role in shaping gold forecast.

 

Gold forecast: Has PBOC’s purchases continued in June?

 

Now, one of the biggest sources of support behind this gold rally has been China’s continued stockpiling of the metal in the last several months. This is something to keep an eye to gauge demand from the world’s largest gold consumer. China's gold purchases are usually reported a few days after the month ends by the People's Bank of China. The reports detail the changes in the central bank's gold reserves. The key question is whether the central bank continued to stockpile the yellow metal or took a break.

 

If it turns out that the PBOC refrained from gold purchases in June, this would not be a surprise given that they have been stockpiling the metal for the last seven months, lifting prices to record levels. Trade uncertainty has eased somewhat, although the escalation in the Middle East conflict last month may have offset that factor. All told, it may have still made sense for the central bank to pause for breather, instead of buying the metal at elevated prices. If it turns out they have indeed stopped buying gold, this may trigger some speculative selling, potentially causing gold prices to stage a correction – a mini one at that.

 

Technical gold forecast: Key XAU/USD levels to watch

 

Source: TradingView.com

 

The above gold price chart shows consolidation, with the metal still clinging on to the rising trend line established since the turn of the year. Key short-term support below this trend line comes in at $3,300, followed by $3,250 and then $3167. On the upside, short-term resistance is seen around $3350, $3400, and then $3430.

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R