Gold Falls Below $3,300 as Stronger USD Weighs on Safe-Haven Demand

Gold Falls Below $3,300 as Stronger USD Weighs on Safe-Haven Demand

Gold (XAU/USD) extended its decline during the early European session on Tuesday, marking its second consecutive day of losses. The precious metal dropped to a fresh intraday low, slipping below the psychological $3,300 level, as a broadly stronger US Dollar and easing trade tensions dented investor appetite for safe-haven assets.

The latest pressure on gold comes after US President Donald Trump announced a delay in imposing tariffs on the European Union. This decision provided temporary relief to global markets, thereby reducing the demand for non-yielding assets like gold. Simultaneously, the US Dollar rebounded modestly from monthly lows, adding additional downside pressure on the yellow metal.

Despite the bearish momentum, gold remains supported by underlying macroeconomic concerns. Persistent worries about the deteriorating US fiscal outlook and uncertainty surrounding future trade policy keep investors cautious. Additionally, expectations that the Federal Reserve will resume cutting interest rates in 2025 serve to limit the USD’s upside potential, which in turn could offer medium-term support for gold prices.

Analysts suggest that while gold is currently vulnerable to near-term corrections, its role as a hedge against economic instability remains intact. Therefore, further downside may be limited unless there is a substantial shift in Fed policy expectations or a resolution of key geopolitical tensions.

As of writing, gold trades just above the $3,290 level, with key support seen near $3,270 and resistance likely to emerge around $3,330.