Tariff Turbulence Resurfaces, Gold Market in Focus as Fed Meeting Minutes Loom
Last week, the gold market exhibited an upward trend. COMEX gold prices rose by 1.84%, closing at $3,346.50 per ounce, while the Shanghai gold main contract also gained 1.10%, reaching ¥777.06 per gram. Behind this rally, tariff-related uncertainties re-emerged, and the upcoming release of the Federal Reserve's meeting minutes this week has also drawn market attention.
On the tariff front, the U.S. Treasury Secretary revealed that current trade negotiations are focused on 18 countries, which account for 95% of the U.S. trade deficit. The U.S. is employing a strategy of maximum pressure in these talks. Tariffs have long been a significant factor influencing financial markets, and for gold, tariff disruptions often alter safe-haven demand dynamics. When trade tensions escalate due to tariffs, investors typically seek refuge in safe-haven assets. Gold, as a traditional safe-haven asset, sees increased demand, driving prices higher. The latest U.S. tariff maneuvers have undoubtedly injected uncertainty into the market, prompting investors to allocate more to gold as a hedge—partially explaining last week's price gains.
However, gold market trends are not solely dictated by tariffs; the Federal Reserve's monetary policy also plays a pivotal role. This week, the Fed’s meeting minutes will be released, offering critical clues about future monetary policy direction. The Fed’s interest rate decisions, quantitative easing measures, and other policies profoundly impact gold prices. If the minutes strike a dovish tone—hinting at potential monetary easing—the U.S. dollar could weaken. Since gold is dollar-denominated, a weaker dollar makes gold relatively cheaper for holders of other currencies, boosting demand and lifting prices. Conversely, if the minutes lean hawkish, signaling possible monetary tightening, the dollar could strengthen, potentially pressuring gold prices downward.
For investors, the current gold market presents both opportunities and challenges. Safe-haven demand stemming from tariff turbulence provides some support for gold prices, but uncertainty surrounding the Fed’s meeting minutes adds volatility. In this environment, investors must stay attuned to relevant developments and exercise caution in decision-making.
On one hand, long-term investors may consider allocating a portion of their portfolios to gold as a hedge against risk. As a store of value, gold can stabilize portfolios amid rising economic and political uncertainties. On the other hand, short-term traders need to remain agile in navigating market fluctuations. Beyond monitoring tariff developments and the Fed’s minutes, they should leverage technical analysis to identify optimal entry and exit points for gold.
Overall, this week, the gold market will navigate the dual influences of tariff turbulence and the Fed’s meeting minutes. Market participants must remain vigilant, closely tracking these key factors to make informed investment choices in a complex and evolving landscape. The future trajectory of gold prices will hinge on further developments in these two critical areas.