Gold outlook: Analyst suggests buying on dips as tariff concerns linger

Gold price outlook: The yellow metal price is likely to be influenced primarily by the US Dollar Index and tariff news flow

Gold: Down as the US Dollar Index firms up further

Gold – July 15, 2025

In the week ending July 11, the yellow metal extending its winning weekly streak to the second straight week, closed with a weekly gain of 0.53 per cent on safe haven demand as the US President unexpectedly imposed steep tariff rates on key economies like Japan, South Korea, Brazil and Canada. On July 15, spot gold traded between $3320 and $3367 as markets closely monitor tariff related developments and the US Dollar Index moves. At the time of writing this report, the yellow metal was trading at $3,329, down around 0.50 per cent for the day, as the US Dollar Index extended its rally.

 

Data roundup:

Much-awaited US CPI report did not offer much comfort on rate cut front as CPI in June rose by 0.25 per cent M-o-M that matched the estimate; it accelerated from 0.1 per cent M-o-M rise in May. CPI Y-o-Y was up 2.7 per cent vs the forecast of 2.6 per cent (prior 2.4 per cent). Core CPI rising 0.2 per cent M-o-M as against the expectation of 0.3 per cent rise was reassuring but core CPI Y-o-Y rose 2.9 per cent that matched the forecast. The CPI report showed that companies are beginning to pass some tariff-related costs, especially in items like apparels, furniture, etc., to consumers. Traders pared their rate cut expectations on the CPI report.

 

China's data dump on July 15 presented a somewhat encouraging economic scenario as 2Q GDP Y-o-Y came in at 5.2 per cent vs the forecast of 5.1 per cent, while industrial production (June) accelerated by 6.8 per cent vs the estimate of 5.6 per cent (prior 5.8 per cent); however, retail sales (June) rose by 4.8 per cent Y-o-Y, which trailed the estimate of 5.3 per cent (prior 6.4 per cent). Property market continues to struggle. Property investment YTD registered a decline of 11.2 per cent as against the expectation of -10.90 per cent as residential property sales YTD declined 5.2 per cent Y-o-Y (prior -2.8 per cent). New home prices dipped 0.27 per cent in June; thus, extending the streak of declining prices to 25th straight month.

 

Elsewhere, Canadian CPI showed the first acceleration in four months and rose at a 1.9 per cent yearly pace in June, as compared with an increase of 1.7 per cent in May. 

Tariff developments:

Canadian PM Carney said that he sees trade talks with the US intensifying.

President Trump said that the US and Indonesia have secured a great trade deal. 

Indonesia will pay 19 per cent tariffs on its exports to the US, while US goods will not attract any import duties. It is to be noted that he slapped 35% tariffs on Indonesia a week ago. 

 

Brazil said that it will intensify trade deal talks with the US.

Nvidia and AMD to resume AI chip sales to China: Nvidia Corp. and Advanced Micro Devices Inc. plan to resume sales of some AI chips to China after Washington's assurances that such shipments would be approved. The US decision is a reversal from its earlier stance that aimed at limiting Beijing's AI ambitions. US treasury Secretary Bessent said that markets should not worry about US-China trade deadline of August 12.

US Dollar Index and yields:

Buoyed by elevated CPI inflation data and trade deal hopes, the US Dollar Index extended its rally to the seventh straight day. The Index, at the time of writing this article, was hovering around 98.60, up around 0.5 per cent for the day.

Ten-year US yields at 4.47 per cent were up around 0.86 per cent, while thirty-year yields, up around 0.59 per cent for the day, were knocking at 5 per cent. Two-year US yields at 3.94 per cent were up by more than 1 per cent. Long-term yields are rising globally once again.

Gold ETF and COMEX inventory:

As of July 14, total known global gold ETF holdings stood at 91.03 MOz - near 2-year high. COMEX gold inventory at 36.74MOz are down around 18.48 per cent YTD on physical delivery demand.

Upcoming data:

Major US data to be released today week include PPI (June) and industrial production (June).

 

Other major data due this week include retail sales advance (June), housing starts (June), University of Michigan sentiment and inflation expectations (July) and import and export price indices (June). UK's CPI (June) will also be released today.

Pressure on Powell:

US Treasury Secretary Scott Bessent suggested that the Fed Chair Powell should step down from the Fed Board when his term as the Fed Chair is up in May 2026 as his presence may send confusing signals to the markets. It is to be noted that Powell’s term as a governor ends in January 2028.

Outlook:

Gold price is likely to be influenced primarily by the US Dollar Index and tariff news flow. Growing risk to the Fed’s independence because of Trump’s team putting pressure on Powell is supportive for the metal. The US Dollar Index may extend its gains in short-term on elevated US CPI data and rising yields as the US assets continue to hold well. US allowing some relaxation in AI chip exports to China eases some of the trade tensions and is somewhat negative for the yellow metal.

 

Buying the dips with a stoploss below $3280 (MCX August gold contract ₹95,700) is advisable as tariff concerns linger. Gold may push to the upper end of its recent range, that is $3425 (₹100,000), should trade tensions escalate. Next support is at $3247 (₹94,800)/ $3224 (₹94,000), while interim resistance is at $3375 (₹98,500).   (This article is by Praveen Singh, senior fundamental research analyst- currencies and commodities, Mirae Asset Sharekhan. Views expressed are his own.)