Gold: Looming Tariff Deadline Limits Safe-Haven Demand
LONDON (July 30) After reviewing the movements of gold futures in different time frames, I find that the looming trade tariff deadline is extending suspicion over the success of trade deals yet to be completed before August 1, as tariff-driven trade deals are typically dollar-friendly and lower the allure of gold amid rising risk appetite.
Undoubtedly, any further extension of this tariff deadline would only heighten suspicions about the intentions of the major trading partners of the U.S., who are reportedly considering de-dollarizing their economies to strengthen their currencies. This comes as they have already revised trade setups with Middle East countries to buy oil in their local currencies.
On the other hand, U.S. President Donald Trump’s idea behind these trade deals is only to strengthen the U.S. dollar by imposing higher tariffs on the trading partners on his terms and conditions.
Till now, the U.S. has completed trade deals with Japan and the European Union, while success is to be achieved on trade deals with Russia, China, Iran, and some other Middle Eastern countries.
However, this could attract new implications if the U.S. President doesn’t come forward with more accommodative trade policies before August 1 or provide some more time to achieve success on trade tariff deals with these countries, otherwise his whole concept of tariff trade deals, which mainly aims to strengthen the U.S. dollar, will be at stake.
As I have already explained the impact of looming uncertainty over trade tariff deadline in my last analysis https://www.investing.com/analysis/gold-strengthening-us-dollar-growing-... , and the gold futures are still trading in a narrow range as the investors are still clueless on Trump’s next move whether he will extend this deadline or not, and while making further trade deals with Russia, Iran and other countries, located in the Middle East to stop accepting local currencies to sell their oil.
Undoubtedly, if U.S. President Donald Trump steps back this time, the currently prevailing indecisiveness could extend, as reflected in the stagnant gold futures, which are reflecting indecisiveness before confirming the next directional move.
Investing.com
