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Gold

Gold spot steadied slightly below its all-time record, as concerns over inflation and economic growth stemming from new US tariffs on its trading partners enhanced the bullion’s safe haven allure.

* Spot gold hovered around USD3360 a troy ounce, with a marginal gain in the last monthly period.

* India’s domestic gold prices rallied further as the weakening rupee amplified gains in the domestic market.

* World’s total gold demand rose by 3% yoy to 1,249 tonnes in the second quarter of 2025.

* Federal Reserve maintained interest rates unchanged at 4.25- 4.5% in this July policy meet.

* Fed Chair Jerome Powell's remarks dimmed the prospects of a rate cut in September, despite president Donald Trump has persistently pushed for lower rates.

* The tariffs imposed by US on its trading partners ranging from 10% base tariffs to 50% on some economies, and 50% tariffs on steel, aluminium and copper came to effect from August 1.

* Global equity gauges were broadly over negative terrain in the last week, as tariffs dimmed global economic growth prospects.

* US dollar index surged to around 99 marks last week, gaining 1.5% against its key rivals.

* Euro and Chinese Yuan shed against USD last week, while Japanese yen gained moderately.

* Indian rupee slipped to 87.23 against the USD as US imposed 25% tariffs on imports from India.

* US Non-farm payrolls increased by a less than expected 73,000 in July, while unemployment rate was at 4.2%.

* US economy grew an annualized 3% in second quarter of 2025, rebounding from a 0.5% contraction in Q1.

Gold Prices Trade Firm

Spot gold held steady, hovering just below its record highs, as markets closely tracked global trade tensions and the pace of economic recovery in major economies. The renewed U.S. tariffs, effective from August 1, along with weaker-thanexpected July job data, continued to support gold’s appeal as a safe-haven asset. The imposition of 50% tariffs on steel, aluminium, and copper stirred market sentiment due to their potential inflationary impact. Although the European Union reached a deal with the U.S. to impose a reduced 15% tariff, concerns remain that economic growth could still be negatively affected. Meanwhile, the soft job data has opened the door for a possible dovish shift by the Federal Reserve, but inflationary pressures from tariffs are likely to remain a key concern. Against this backdrop, demand for gold remains robust, supported by ongoing central bank purchases and strong inflows into gold-backed ETFs.

Fed kept the rates steady,

inflation fears persist The Federal Reserve held interest rates steady at 4.25%–4.5% in its July 2025 policy meeting, despite mounting pressure from President Donald Trump and growing dissent within the Fed itself. The decision came amid strong economic data, including a 3% annualized GDP growth in Q2, which supported the Fed’s cautious stance. Fed Chair Jerome Powell emphasized the need for stability and cautioned against premature rate cuts, stating that while inflation has eased, it remains above target. He reaffirmed the Fed’s data-dependent approach, indicating that policy changes will hinge on future economic indicators. Meanwhile, the latest non-farm payrolls data, which showed a slowdown in job additions for July, has increased the prospects of a rate cut in September.

Gold demand rose 3% yoy in Q2 2025 –

World Gold Council According to world Gold Council, total gold demand rose by 3% year-on-year to 1,249 tonnes in second quarter of 2025, while its value surged by 45% to USD132 billion. This growth was largely driven by strong inflows into global gold-backed ETFs for the second consecutive quarter, fueled by geopolitical tensions, trade policy uncertainty, and rising gold prices. Bar and coin investment also saw a significant boost, marking the strongest first half since 2013, as investors sought gold’s safe-haven appeal. Central banks continued to support demand by adding 166 tonnes to official reserves, although the pace of buying slowed slightly. Jewellery demand showed a divergence, with widespread declines in volume, nearing 2020 pandemic levels, while spending increased due to higher prices. Meanwhile, gold used in technology faced pressure from potential US tariffs.

SPDR gold backed ETFs Physical holdings surged in July

The SPDR gold backed ETFs physical holdings surged by 0.21% in June, after posting a monthly gain of 2.4% in June. The physical holdings with SPDR gold trust is 306.97 million ounces as on the first week of August.

Money Mangers reduced net longs in COMEX Gold F&O

Hedge funds and money managers reduced long positions and slightly increased short positions in COMEX gold futures and option contracts at the week ended August 1, and the net long positions declined.

Outlook

Gold prices are expected to remain resilient amid ongoing traderelated uncertainties. The newly imposed U.S. tariffs have reignited inflation fears and raised concerns over global economic growth, reinforcing gold’s appeal as a safe-haven asset. Expectations of potential interest rate cuts by the Federal Reserve later this year have further supported market sentiment. Investment demand for gold remained strong in Q2 2025, although higher prices weighed on jewellery consumption. The U.S. economy showed growth in Q2 primarily due to reduced imports, but the broader outlook is clouded by the inflationary impact of tariffs, which continues to support demand for bullion.

Technical View

London Spot: MACD oscillators narrowed its bullish divergence, while the Relative Strength Index (RSI) remains at overbought levels suggesting a subdued buying pressure amid prevailing positive sentiments. Therefore, prices likely to trade range bound with mild positive bias. A Liquidation move is possible with slips below $3245 a troy ounce.

MCX: Mild positive bias expected in the upcoming monthly period, while a voluminous move below the support Rs.98200 can induce liquidation pressure.

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