Gold rose to around $3,320 per ounce on Wednesday, rebounding as investors seized the opportunity to buy the dip following a recent bout of price weakness. The move reflected renewed interest in the precious metal’s safe-haven appeal amid lingering global uncertainties.
Gold rises as investors buy the dip
However, the upside was capped by a slight improvement in geopolitical sentiment, particularly as U.S.–EU trade tensions showed signs of easing. In a notable development, U.S. President Donald Trump walked back on earlier threats to impose sweeping 50% tariffs on European Union imports, opting instead to delay their implementation until July 9 to allow room for continued negotiations. The move helped soothe market nerves and reduced immediate demand for risk-off assets like gold.
At the same time, the U.S. dollar strengthened, weighing on gold's momentum. A robust rebound in consumer sentiment data added fuel to the greenback’s advance, with the Conference Board's measure of U.S. consumer confidence surging in May from near a five-year low. The stronger dollar made dollar-denominated gold more expensive for holders of other currencies, tempering foreign demand for the metal.
On the monetary policy front, Minneapolis Federal Reserve President Neel Kashkari reiterated a cautious stance, advocating for a pause in interest rate changes until the inflationary impact of heightened tariffs becomes clearer. His remarks added to the growing sense of division within the Fed about the timing and direction of future policy moves, especially as inflation data remains mixed and the full economic effects of trade disruptions are yet to be felt.
Eyes on next Fed moves
Investors are now closely watching for additional clues about the Federal Reserve’s rate outlook. The minutes from the central bank’s latest policy meeting, due to be released later today, are expected to offer further insight into internal deliberations on inflation, growth, and the risks posed by global trade dynamics. Additionally, the upcoming release of the Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — on Friday will be closely scrutinized. A stronger-than-expected reading could revive concerns about persistent inflation and reinforce bets on tighter monetary policy, while a softer print might bolster gold as expectations shift toward a more dovish stance.
Despite the recent pullback in price and stronger dollar pressures, gold remains underpinned by a confluence of macro risks — from geopolitical flashpoints and trade negotiations to uncertain central bank paths — keeping the metal well supported as a strategic hedge in diversified portfolios.
