Currencies and Commodities at Mirae Asset Sharekhan, gold is likely to remain buoyant in the short-term. (AP Photo/Jae C. Hong)
On July 8, 2025, gold prices are expected to trade within a tight range amid heightened global trade tensions following President Donald Trump’s decision to extend the reciprocal tariff deadline to August 1. Despite the delay, the US has imposed fresh tariffs on 14 countries, including 25 per cent duties on Japan and South Korea, stoking investor risk aversion and keeping gold’s safe-haven status intact.
According to Praveen Singh, Senior Fundamental Research Analyst – Currencies and Commodities at Mirae Asset Sharekhan, gold is likely to remain buoyant in the short-term. “Upside in gold may be capped due to the extension of the tariff deadline from July 9 to August 1,” he noted, but added that China’s consistent buying and elevated ETF flows continue to support prices.
Spot and Futures Market Movement
- Spot gold traded between $3,296 and $3,343 on July 7, settling around $3,330, down 0.20 per cent on the day.
Key Market Drivers
- Tariff Developments
Trump’s letter-driven tariff diplomacy has already targeted nations including Japan, Bangladesh, South Korea, and Indonesia, imposing rates up to 40 per cent in some cases. While the August 1 deadline gives negotiators more time, gold remains sensitive to trade tensions, especially if retaliatory measures follow.
The US nonfarm payroll report for June beat expectations, but wage growth remained weak. The ISM Services Index showed a mild recovery at 50.80, adding mixed signals to inflation and interest rate trajectories.
The release of FOMC minutes on July 9 could offer insights into future rate cuts. Historically, lower interest rates support gold, as they reduce the opportunity cost of holding non-yielding assets.
The US Dollar Index strengthened to 97.58, and 10-year yields rose to 4.38 per cent, briefly pressuring gold. However, safe-haven buying offset some of the losses.
Global Demand Trends
- China’s central bank bought 70,000 ounces of gold in June, continuing an eight-month buying streak and signalling confidence in the metal’s long-term value.
Forecast and Strategy
In the very short term, analysts expect gold to trade between $3,292 (Rs 96,200) and $3,370 (Rs 98,500). A potential breakthrough in trade agreements could weigh on prices, while any escalation in tariff actions is likely to bolster them. “Selling into rallies with tight stop-losses is the preferred strategy in the ultra-short term,” Singh advised.
Key levels to watch:
- Support: $3,247 (Rs 94,800)
While the extension of the US tariff deadline has softened near-term uncertainty, the broader trajectory for gold remains supported by geopolitical tension, central bank demand, and volatile currency movements. Investors are advised to closely monitor trade negotiations and upcoming central bank cues for clearer direction.