Insights 
VT 
Gold fell to $3,182 as optimism around US-China trade eased safe-haven demand. The US Dollar softened, with the DXY near 100.60, following lower-than-expected inflation figures and US-South Korea currency talks.
Positive geopolitical sentiment and risk appetite surged, affecting gold and pushing US yields higher. Key economic data anticipated this week include PPI and Retail Sales, expected to influence Federal Reserve decisions.
Gold Demand And Inflation Figures
Gold slipped below $3,200 due to reduced Chinese ETF demand and US trade talks with Japan and South Korea. US April CPI was 2.3% YoY, below expectations, signalling slower inflation progress amid tariff uncertainties.
Market sentiment shows a 49.9% chance of a Fed rate cut in September. Speculation continues regarding the Trump administration’s preference for a weaker USD and its influence on exchange rates.
Technical indicators demonstrate a bearish trend for the DXY, with the RSI and other metrics showing neutral to mild selling conditions. Support and resistance levels are identified around 100.60, indicating potential price movements.
The US-China trade war, initiated by tariffs in 2018, persists under President Trump with new tariffs planned. This has impacted global economics with increased trade barriers and inflationary pressures.
Impact Of Tariffs And Trade Policies
With geopolitical tensions easing and headline inflation undershooting expectations, gold has seen considerable downside momentum, falling below $3,200. The muted demand from Chinese exchange-traded products has added to the drag. Meanwhile, the US Dollar Index (DXY) remains under pressure near the 100.60 level, weighed down by weak consumer price data and renewed diplomatic efforts, notably in the realm of currency coordination between Washington and Seoul.
That 2.3% year-on-year increase in April CPI, coming in lower than expected, fuels the argument that the Fed may have more room to pivot on rates without risking a price surge. Such data reinforces the view that inflation might not be accelerating at a pace previously feared, especially once tariff-related base effects are stripped away. Risk appetite, in this context, has strengthened, with both US Treasuries and equity markets responding in kind by rotating out of safe-havens like gold.
US yields have crept higher on the back of this recalibration, with traders now closely eyeing upcoming PPI figures and retail sales data. Both have the potential to either support the soft inflation narrative or disrupt it entirely. Should input costs begin to creep upwards once more, the case for sustained monetary easing would weaken. As it stands, the probability of a Fed rate cut in September hovers just below 50%, reflecting a market still divided on direction.
The DXY’s technical setup points to a weak posture, though not yet an aggressively bearish one. Momentum indicators are showing neither extremes of overbought nor oversold—suggesting that we are in more of a wait-and-see phase, pending fundamental catalysts. Price action will likely oscillate around the present support and resistance bands at 100.60 until more decisive data emerges.
On the trade front, tariffs remain a central tool for the White House, and the newest set of levies continues the protectionist path set in motion six years ago. This strategy has shaken commodity markets, especially where raw imports see direct impact from duties, often distorting typical cost structures for end-consumers. It’s not just about bilateral friction with Beijing any longer—negotiations have expanded to include Tokyo and Seoul, adding complexity to trade-based foreign exchange positioning.
From our perspective, one has to weigh not only economic releases but also the political tone out of Washington. There have been consistent signals favouring a softer greenback, presumably to provide export competitiveness. That, in turn, tempers the natural rally one might usually expect in an uncertain macro setting. If further confirmation emerges around policy signals, price values across FX and metals could quickly recalibrate, especially with risk-on markets preferring clarity and lower volatility.
Those engaged in interest rate or currency exposure positioning should stay attentive to breakouts around the edges of this DXY range. Any breach below support could add weight to dollar-bearish trades, particularly against higher-yielding or commodity-tied pairs. Similarly, in the bullion markets, continued ETF liquidation combined with higher bond yields could press gold lower, unless inflation expectations revive unexpectedly. The current configuration rewards those who follow developments closely rather than assume any longer-term directional bias.
