Gold Price Dips to $3,300 Amid Risk-On Sentiment and USD Demand

Gold Price Dips to $3,300 Amid Risk-On Sentiment and Revived USD Demand

Gold prices extended their decline for the second consecutive day on Tuesday, retreating toward the $3,300 mark. The precious metal faced selling pressure due to renewed optimism following the postponement of EU tariffs by US President Donald Trump, which in turn fueled a modest rebound in the US Dollar (USD). This stronger USD weighed on gold, traditionally seen as a safe-haven asset.

Despite the short-term downside momentum, several factors suggest caution before betting on further declines. Market participants remain concerned about the US fiscal outlook, as growing national debt and deficit worries cast a shadow over the US economy. Additionally, expectations that the Federal Reserve (Fed) might implement further rate cuts later this year are limiting the upside potential of the USD, providing some support to gold prices.

Geopolitical uncertainties and trade policy ambiguity continue to keep investors on edge, which may keep gold demand intact in the near term. Traders are also awaiting key US economic data releases and the Federal Open Market Committee (FOMC) minutes scheduled for Wednesday, which could provide fresh direction for the gold market.

Given these mixed signals, any further dips in gold prices could present buying opportunities for investors, as the market braces for more clarity from upcoming macroeconomic developments.