Gold pulls back on better risk appetite to start the week

The move matches up with the change in risk flows after Trump agreed to delay the 50% tariffs on the EU to 9 July. His initial decision on Friday to press for the tariffs to go into effect on 1 June helped gold to move up at the end of last week. The drop today eats just a little into that, as buyers continue to keep control in the near-term chart:

The policy flip flopping is making it hard for gold to build a consistent bias in the past few weeks. That especially with the trade war against China taking a backseat for the moment. That will of course come into focus again later on surely. But for now, traders and broader markets are turning their attention to the trade disputes elsewhere.

The slight easing in gold today might not look like much but perhaps the bigger picture chart might offer something more interesting.

As much as I am a gold bug myself, the latest chart pattern above is something to be wary about. There is a lower highs, lower lows pattern potentially forming and a lot will ride on how price action plays out this week.

If buyers fail to hold the near-term momentum from the hourly chart closer to the $3,300 level, that could spell some danger for a continuation lower in gold as it looks to find a base.

With markets still grasping at the new reality of tariffs and not yet fully taking in the implications of it all, gold might face some headwinds as the spotlight stays on trade deals for the time being.

But once the dust settles, we’ll have to understand what that all means as Trump has just hoodwinked the world into accepting higher tariffs all around. And if the trade conflict with China escalates again especially, that will add to another tailwind for gold in the time to come.

For now though, gold bugs might have to bide their time and deal with a consolidative mood at best perhaps.

This article was written by Justin Low at www.forexlive.com.