Insights 
VT 
Gold Price Movement
Gold prices remained below $3,340 during the European session on Monday. The price slipped to around $3,333, with US markets closed for Memorial Day, following President Trump’s announcement of delayed EU tariffs until July 9.
Although the tariff delay briefly reduced safe-haven demand, concerns linger about the US government’s fiscal position. Citigroup increased its three-month gold price target to $3,500/ounce, citing tariff concerns and global economic risks.
The US Dollar weakened, continuing its decline as fiscal worries impact market sentiment. Speculators trimmed their positions, reducing their US Dollar exposure from $16.5 billion to $12.4 billion.
Trump’s tariff delay also benefitted risk assets, introducing a temporary relief in the market. Gold support levels emerge at $3,307 and $3,258, with the potential for a return to higher levels if resistance at $3,386 and $3,415 is surpassed.
Interest rates impact gold by affecting opportunity costs and currency strength. Higher rates typically lower gold prices by boosting the US Dollar. Additionally, the Fed Funds rate, a key economic indicator, influences overall financial markets.
Gold Market Sentiment
We saw gold hold beneath $3,340 during Monday trading in Europe, with pressure pushing the price slightly lower to around $3,333. With US markets closed due to Memorial Day, the move was thinly traded but still notable. Much of the hesitation stemmed from Trump’s announcement that tariffs on the EU would be postponed until early July. While this announcement briefly cooled demand for traditional safe havens like gold, it did little to quiet broader worries about the US’s fiscal position, which continues to weigh on currency sentiment.
Citigroup has now moved its three-month forecast for gold prices up to $3,500 per ounce. This revised outlook is largely based on persistent global risks and renewed fears of trade-related tremors. Currency markets still appear uneasy, and positioning reflects that. Hedge funds and other large speculators have begun pulling back from their net long US dollar holdings. In numbers, those positions dropped notably—from $16.5 billion down to $12.4 billion—suggesting a shift in conviction or at least a desire to reduce exposure for the time being.
As for broader market reaction, equities and high-beta assets saw modest relief in response to the trade news. Investors responded to the tariff delay by reallocating towards riskier corners of the market. While this added some weight to gold, it wasn’t enough to break through known resistance levels at $3,386 and $3,415. We’ll continue watching those price levels closely in the coming sessions; any meaningful run above them could clear the way toward the mid-$3,400s.
On the downside, support for gold is visible around $3,307 and then more firmly near $3,258. If we should approach those regions again, traders with short exposure may look to lock in profits, while those seeking entry points may circle back with fresh longs. Price action around these areas often provides opportunities for well-timed optionality setups—provided liquidity allows.
Now, interest rates remain the key variable here. They play a direct role by changing the opportunity cost of holding gold—non-yielding assets tend to underperform when rates climb. Indirectly, interest differentials drive flows in foreign exchange, which matters because gold is priced in dollars. The strength or weakness of the greenback is often the hinge on which bullion pricing swings. Lately, dollar softness has lent a supportive undertone to gold, even as day-to-day volatility increases.
One figure that continues to draw our attention is the Fed Funds rate. This benchmark not only signals monetary policy direction, but it also impacts yield-seeking across asset classes. Tightening conditions by the Federal Reserve tend to strengthen the US dollar, while easing, or the expectation of it, opens the door for gold to grind higher. During this quieter week, even modest shifts in rate expectations may affect sentiment more than usual.
In the weeks ahead, positioning around these rate expectations and geopolitical commentary needs to be navigated with precise timing. Events may stay relatively quieter for a few days, but that should not be mistaken for stability—shifts can still come fast, and premiums in most volatility structures remain sensitive.
We are watching implied vols closely across gold and dollar pairs. Spread dynamics are showing signs of stress in certain tenors, which has implications for delta risk and gamma hedging tactics. Any sharp directional move, particularly one triggered by fiscal headlines or macro data surprises, will likely test the preparedness of those holding short vol or aggressive carry positions. Stay vigilant.
