Gold Forecast: XAU/USD refreshes three-week high, aims to revisit $3,400

LONDON (July 14) Gold price (XAU/USD) posts a fresh three-week high around $3,370 during the European trading session on Monday. The precious metal extends its winning streak for the fourth consecutive trading day on Monday, as global trade tensions have escalated following the imposition of 30% tariffs by the United States (US) on imports from its major trading partners, the European Union (EU) and Mexico, over the weekend.

Theoretically, heightened global economic tensions increase demand for safe-haven assets, such as Gold.

Over the weekend, US President Trump announced tariffs on the EU and Mexico for not striking a deal during the 90-day reciprocal tariff pause period.

Meanwhile, EU President Ursula von der Leyen has stated that her team is still in talks with Washington and has postponed plans of countermeasures till the August 1 deadline. However, she has warned that the trading bloc could announce proportionate countermeasures, if required, to safeguard its interests.

Last week, the US also imposed tariffs on 20 nations out of which notable names were Japan, Canada, and South Korea that are its leading trading partners.

Going forward, investors will focus on the US Consumer Price Index (CPI) data for June, which will be published on Tuesday. Investors will pay close attention to the US inflation data as it will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.

The CPI report is expected to show that price pressure grew at a faster pace. Gold price performs strongly in a high-inflation environment.

Signs of high inflation often force Fed officials to argue in favor of keeping interest rates higher for a longer period. Higher interest rates by the Fed bode poorly for non-yielding assets, such as Gold.

FXStreet