Gold Surges Over 1% on August 1 Amid Tariff Uncertainty and Dollar Pause

Gold prices experienced a notable increase in early August as market participants navigated an environment of tariff uncertainties and a pause in the dollar's rally. Spot gold rose by over 1% to approximately $3,312.03 per ounce, while U.S. gold futures gained 0.4%, reaching $3,309 per ounce. The recent retreat from a one-month low highlighted the impact of global economic developments on gold's safe-haven appeal.

Investor focus turned to the anticipated release of U.S. Nonfarm Payroll (NFP) data for July, which was expected to provide further insights into the Federal Reserve's monetary policy trajectory. The consensus estimated that the U.S. economy would add 110,000 jobs in July, marking a decrease from the 147,000 jobs in June. In response, traders adjusted their expectations surrounding Federal Reserve interest rate decisions, with the probability of a rate cut in September declining to 39.2% from 58.4% the previous week.

Federal Reserve Chairman Jerome Powell, in a recent press conference, emphasized that the economy remains in a stable position despite inflation running slightly above target. Powell highlighted that the impacts of tariffs were beginning to be reflected in pricing, adding another layer of complexity to the monetary policy outlook. While high interest rates may dampen demand for non-yielding assets like gold, gold's status as a hedge against inflationary pressures continues to support its demand.

From a technical perspective, gold prices hovered around the 50-day Exponential Moving Average (EMA), which presented a resistance point at $3,320. The relative strength index (RSI) dipped close to 40—a level indicating possible bearish momentum if breached. Key support levels were observed at $3,245 and $3,200, while breaking above the $3,500 threshold could push prices towards resistance levels at $3,550 and $3,600.

On the investment front, the World Gold Council noted a 26% appreciation of gold in the first half of the year, outperforming many asset classes. Analysts predict that while gold may stay within a narrow trading range in the latter half of the year, any geopolitical or economic downturns could further enhance its safe-haven attractiveness. The second quarter's global gold demand increased slightly year-on-year, fueled by a significant rise in investment.

Concurrently, other precious metals saw mixed movements: spot silver decreased 0.5% to $36.95 per ounce, platinum rose marginally by 0.4% to $1,318.20, and palladium increased about 1% to $1,216.27. Investors are now shifting their attention to upcoming economic indicators, including the U.S. core PCE index data, that could influence the Federal Reserve’s future actions.