Gold prices slip slightly from recent highs; tariff negotiations in focus

Investing.com-- Gold prices fell slightly Tuesday, as investors backed profits from the previous session’s over one-month high as uncertainty over U.S. tariffs and interest rates kept haven demand strong.

At 04:25 ET (08:25 GMT), spot gold fell 0.2% to $3,389.27 an ounce, having surged 1.4% on Monday, and gold futures fell 0.2% to $3,401.12/oz. 

U.S. tariff fears mount as deadline nears 

Markets remained largely on edge over U.S. tariffs as an August 1 deadline for their imposition draws closer.

Risk sentiment was rattled by waning hopes for an EU-U.S. trade deal, with the European Union was seen preparing retaliatory tariffs in the face of reportedly higher-than-anticipated U.S. tariffs. 

The Trump administration also recently signaled that it was unlikely that it would extend the August 1 deadline.

U.S. President Donald Trump has released a slew of letters over the past two weeks outlining tariffs of between 20% and 50% on major U.S. trading partners, sparking market concerns while also drawing threats of retaliation from some countries. 

This uncertainty boosted haven demand for gold and other precious metals, with silver and platinum also rising sharply in recent months. 

However, there was some profit-taking seen Tuesday, with spot silver falling 0.4% to $39.165/oz and spot platinum dropping 0.5% to $1,488.10/oz. 

Among industrial metals, benchmark copper futures on the London Metal Exchange edged 0.1% higher to $9,879.25 a ton, and COMEX copper futures rose 0.2% to $5.6480 a pound. Trump’s 50% tariff on copper is also set to take effect from August 1. 

Data from the Shanghai Futures Exchange showed that weekly inventories for all base metals rose over the past week.

Copper stocks increased by 3,094 tonnes to 84,556 tonnes as of Friday. Aluminium inventories rose by 5,625 tonnes to 108,822 tonnes, while zinc stocks increased by 9.3% WoW to 54,630 tonnes, the highest since 18 April.

Bullish case for gold - Bernstein 

Wall Street may be underestimating gold prices by clinging to outdated forecasting tools, Bernstein said, while making a bullish case for the metal hitting $3,700 an ounce by 2026.

Analysts at Bernstein analyzed 15 common methods used to predict gold prices and found that most no longer work, or never really did.

Instead, the brokerage identified six methods that remain useful, many of which focus on government and monetary policy rather than traditional commodity fundamentals.

Averaging these, Bernstein projects a 2026 gold price of $3,700 an ounce, well above the current Wall Street consensus of $3,073.

Dollar cools as Fed anticipation builds 

Gold’s Monday rally also came amid some declines in the dollar, which pulled back from two straight weeks of gains.

Still, the dollar was sitting on some strength amid growing conviction that the Fed will leave interest rates unchanged next week.

But markets remained anxious over the Fed’s independence, amid growing speculation that Trump will seek to fire Powell. The Fed chair has signaled little intent to cut interest rates, much to the chagrin of the president and his allies. 

Powell is set to speak later on Tuesday, although it was unclear whether the Fed Chair will comment on monetary policy, given that his address comes during the Fed’s pre-meeting media blackout period.

Ambar Warrick contributed to this article

The yellow metal was boosted at the start of the week by reports that the European Union was preparing retaliatory tariff measures against the U.S. over President Donald Trump’s planned tariffs, with Washington seen seeking at least 15% tariffs on the bloc. 

Uncertainty over U.S. interest rates and the Federal Reserve also boosted haven demand before a meeting next week. The Fed is widely expected to keep rates unchanged, despite growing calls from Trump that he cut rates immediately.