Gold prices dipped slightly on Tuesday, giving back a bit of ground after a strong three-day rally fueled by Fed cut speculation and global trade tensions. But if history is any guide, this pullback may just be the calm before another golden storm.
As of 5:00 a.m, ET, spot gold eased 0.2% to $3,364.65 an ounce, with December futures also down 0.2% at $3,419.02. The retreat followed a sharp 2% surge last Friday after disappointing U.S. job data sent investors running toward safe-haven assets.
The July payroll report was a letdown, showing just 73,000 new jobs and sharp downward revisions to prior months. Unemployment also ticked up to 4.2%, giving traders more reason to believe the Federal Reserve will pivot. Markets are now pricing in a 92% chance of a rate cut in September, according to CME’s FedWatch tool.
Historically, gold thrives in low-rate environments. When interest rates fall, the opportunity cost of holding gold — which doesn’t pay interest — drops, making it more attractive. Pair that with a weakened U.S. dollar and rising geopolitical uncertainty, and you’ve got a recipe for continued bullish momentum.
Gold has long been a hedge against both economic slowdown and political chaos. That tradition held steady Tuesday as fresh tariff threats against India stirred market nerves and reignited interest in the yellow metal.
Other metals had mixed results: platinum slipped 0.9%, silver gained 0.4%, and copper futures sagged 0.2% after last week’s 20% plunge following Trump’s tariff carve-out for refined copper.
For now, gold’s slight slip looks less like a reversal and more like a breather — a historical pattern before the next upward march. With Fed action looming and uncertainty lingering, gold bulls may not be done yet.