**Gold Prices Dip Slightly in Early Asia Trading as Trade Tensions Ease**
In early Monday trading (May 26) across Asia, gold prices saw a modest pullback after briefly touching $3,325 per ounce. The dip was largely attributed to U.S. President Donald Trump’s weekend announcement to delay planned tariffs of up to 50% on EU goods until July 9. This pause in trade escalation helped ease market jitters and slightly reduced the appeal of gold as a safe haven.
Trump’s decision followed a call with EU Commission President Ursula von der Leyen, as both leaders sought more time for negotiation to avoid an immediate trade conflict. With risk sentiment marginally improving, some investors, particularly in Asia, took the opportunity to lock in profits after recent price rallies. For instance, in India, local 24K gold prices fell to ₹9,764 per gram, with 22K slipping to ₹8,950—highlighting how local demand is sensitive to price swings.
Despite the cooling of risk aversion, a weakening U.S. dollar provided support to gold. The dollar index dropped to its lowest level in nearly a month, boosting appetite for gold in non-dollar markets. Meanwhile, broader concerns about U.S. fiscal discipline remain front and center. Rating agency Moody’s recently downgraded the U.S. long-term credit rating from Aaa to Aa1, citing rising debt and deficit risks. This development reinforces gold’s traditional role as a hedge—particularly for central banks looking to strengthen their reserves.
On the technical front, gold is seeing near-term support around $3,307. A break below this level could open the door to $3,258, while a move above $3,386 might pave the way toward this year’s high near $3,440. Market strategist Kyle Rodda noted that despite short-term pressure from easing risk sentiment, “policy uncertainty continues to offer a strong floor for gold prices.” He views the current dip as a potential entry point for long-term investors.
Globally, gold price movements varied. In Dubai, 24K gold rose to AED 404.75 per gram, up AED 8.75—equivalent to roughly $3,348 per ounce—suggesting buying interest in response to the minor correction. In Vietnam, Prime Minister Pham Minh Chinh instructed the central bank to explore a national gold exchange to curb smuggling and enhance market oversight, a move that could influence regional gold flows in the future.
Looking ahead, investor attention is turning to the upcoming FOMC meeting minutes and ongoing Senate debates over Trump’s proposed tax reform. Analysts warn that if the tax package passes, it could amplify fiscal deficits and rekindle demand for gold. According to Reliance Securities, despite short-term headwinds, factors such as the U.S. credit downgrade, central bank purchases, and persistent trade risks could support a move toward $3,500 per ounce in June.
In summary, while trade tensions have cooled for now, geopolitical and policy-related uncertainties remain. Trump’s pressure on companies like Apple to “manufacture in America” adds complexity to the outlook. In this volatile environment, gold continues to serve a crucial role as a hedge. Investors should stay alert to policy shifts in the coming weeks.
