Colin Cieszynski - Chief Strategist at SIA Wealth Management assessed that trade tensions will be beneficial for gold prices: "With US President Donald Trump once again being tough in his tariff statements, I am leaning towards the possibility of gold prices continuing to increase in the next few weeks" - he said.
Sharing the same view, Adam Button - Head of currency strategy at Forexlive.com said that the market has chosen gold as a defensive asset in the context of the trade war:
The trade war has returned, and gold is a trading tool in this war. I think gold buyers will become more confident, because now they understand how the market reacts. In the early stages of the trade war, gold was sold off due to the withdrawal of risky assets, but now that is no longer the case.
The market is forming muscle memories, meaning that every time there is a trade war, people buy gold, buy Yen, buy Swiss francs and sell USD.
I think that will make trading more intense, with higher leverage, stronger confidence and ultimately higher gold prices. Gold is gradually becoming a priority asset as the trade war becomes tense. If you think the trade war is getting worse, buy gold. If you think the situation will improve, then take profits, he added.
Marc Chandler - CEO at Bannockburn Global Forex said that gold prices are preparing to challenge the $3,400/ounce mark once again. The correction from the top on April 22 seems to be over, he said.
Immediate delivery prices have touched the trend line drawn from the peaks of April and May. The momentum indicators are currently positive, and the Dollar Index has just ended a 4-week increase streak, which is also of an adjustment nature. It seems that the three-step correction model of gold prices has been completed and the possibility of a new peak in the medium term is reasonable.
Alex Kuptsikevich - Senior market analyst at FxPro was also optimistic: Last weekend, gold held steady on the 50-day moving average, which was a technical victory for buyers. The bigger victory comes from Donald Trump's return to a pro- tariffs stance, including criticizing Apple and declaring his readiness to increase import tariffs from the EU by up to 50%.
The markets instinctive response to such information is to pour into gold. That is even more true as concerns about US bonds are growing, after Moody's downgraded its credit rating to the highest.
In general, the gold market is too hot and may have difficulty reaching a new peak in the next few weeks. However, next week could still be an opportunity for buyers to test above $3,400/ounce or even reach $3,500/ounce, Kuptsikevich said.
Daniel Pavilonis - Senior commodity broker at RJO Futures, said that gold prices are at a very sensitive time. I have painted a trend line from the peak on April 21 at $3,509 to the peak on May 5, and we are currently right at the limit there. The question is: Will prices reverse to decrease or continue to increase?
If in the next few sessions, closing prices surpass this trend, the next mark will be 3,455 USD/ounce and then up to 3,509 USD/ounce. If we get past $3,509/ounce, we have a very quick chance to get to $3,800/ounce, he said.
Pavilonis said he found market sentiment to be very cautious, many customers are delaying business operations. I work with customers from manufacturing, construction to domestic and foreign investment in the US... all seem to be on hold.
Once the situation becomes clearer, we witness strong fluctuations in 10-year bond yields, which makes investment more difficult due to the impact on exchange rates and inventories. There is too much uncertainty in the market, and I think that is the factor driving the current gold price, the expert said.
Jim Wyckoff - Senior Expert at Kitco commented: "Gold prices are in a steady uptrend thanks to continued safe-haven demand".
