Tariff Relief or Temporary Truce?

Gold markets saw heightened volatility this past week as trade headlines shifted sentiment rapidly. The US and EU agreed to a landmark deal reducing proposed reciprocal tariffs from 30% to 15%, covering most exports except for critical sectors like steel, aluminum, and chips. The agreement was touted as a win for “stability and predictability,” though some EU industries expressed frustration over concessions. Simultaneously, the US and China extended their tariff pause by 90 days, while letters are being sent to other nations not yet under formal agreements, raising headline risk particularly for South Africa and other PGM-producing nations. 

Gold sold off sharply on the US-EU deal headlines, dropping over $100 from its recent peak of $3,440/oz, and now sits at key technical support near $3,250/oz. The “trade policy premium” built into gold estimated at $300/oz continues to deflate as deals are reached and geopolitical risk appears to ease. Still, concerns linger. Central banks and sidelined investors must reengage or further downside is possible. 

Macroeconomic factors remain mixed: while a stronger US dollar, resilient equities, and hawkish Fed expectations have capped gold’s upside, structural deficits, inflationary tailwinds, and the risk of Fed interference (Trump-Powell tensions) still support the long-term bull case. 

In silver and PGMs, tight physical markets and renewed ETF inflows are offsetting some pressure from gold’s decline. Platinum lease rates and premiums remain elevated, while silver rides a retail-fueled momentum wave. 

With August 1st looming as a critical “Liberation Day” tariff deadline, volatility should persist across metals.