Safe-Haven Demand Ebb Drags Gold Lower, Yet Medium- and Long-Term Upside Intact

Economic

Commodity

Summary:

Gold slid to $2,427 per ounce on Monday, testing its monthly low, as easing geopolitical tensions and rising optimism over global trade curbed safe-haven flows. Despite the near-term correction, we retain a constructive view on gold’s medium- and longer-term trajectory.

BUY XAUUSD

EXP

EXPIRED

3270.00

Entry Price

3393.00

3230.00

4206.80 +8.89 +0.21%

Pips

EXPIRED

3230.00

3328.74

Exit Price

3270.00

Entry Price

3393.00

Fundamentals

Gold prices rebounded in a corrective move on Tuesday after touching a low of $3,247 per ounce in the previous session, as fragile but still-holding ceasefire agreements in the Middle East eased fears of renewed regional conflict escalation. Meanwhile, mounting optimism surrounding a potential U.S.-China trade deal—highlighted by President Donald Trump’s positive signals last week—dented safe-haven demand, weighing on the precious metal.

Although gold has retreated modestly from record highs amid growing expectations that the most acute phase of the trade war may be nearing its end, we remain constructive on its long-term value proposition.

YTD in 2025, gold has emerged as the top performer among global asset classes. Central bank buying and ETF inflows have been key drivers, with European Central Bank data showing gold has surpassed the euro to become the world’s second-largest reserve asset after the U.S. dollar.

We believe a confluence of factors—including declining real rates, a weaker dollar, elevated geopolitical risk premiums, and a structural shift toward institutional accumulation—will continue to underpin gold prices. For instance, World Gold Council data reveals that central banks have purchased an average of over 1,000 tons annually in the past three years—more than double the decade-long average—underscoring the metal’s enduring appeal as a strategic reserve asset.

Safe-Haven Demand Ebb Drags Gold Lower, Yet Medium- and Long-Term Upside Intact_1

Technical Analysis

Gold is navigating a transitional regime where traditional correlations are being stress-tested. The interplay of easing geopolitical risk, sustained growth optimism, and expectations of prolonged monetary easing has created a complex backdrop for investors.

Price action hinges on whether risk-on sentiment persists or if renewed concerns over sticky inflation, geopolitical flare-ups, or economic uncertainty rekindle safe-haven bids. For now, gold is in a wait-and-see mode. The next decisive move will reflect which narrative ultimately dominates broader market sentiment. Based on momentum dynamics, we favor a long bias for July, with a tactical entry window on dips.

Trading Recommendations

Trading Direction: Buy

Entry Price: 3270

Target Price: 3393

Stop Loss: 3230

Valid Until: July 15, 2025, 23:55:00

Support: 3258/3247/3232

Resistance: 3247/3301/3321

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

WTI crude oil prices edge higher from recent lows but remain significantly below last week's peak, as market expectations for increased OPEC+ supply and slowing global demand weigh on sentiment.

SELL WTI

EXP

EXPIRED

64.000

Entry Price

57.000

66.000

59.960 +0.151 +0.25%

Pips

EXPIRED

57.000

67.535

Exit Price

64.000

Entry Price

66.000

West Texas Intermediate (WTI) crude oil prices showed modest signs of recovery on Monday, climbing slightly from two-week lows. However, any meaningful rebound remains elusive as futures hover near $65 per barrel—still roughly $12 below last Monday’s highs—amid a confluence of bearish macroeconomic and geopolitical developments. The subdued recovery is emblematic of broader market apprehension, as traders digest fresh data pointing to a softening global economy and rising expectations that OPEC+ will move ahead with another supply hike this week.

Prices have largely been range-bound in recent sessions, with the $66.00 level acting as a short-term ceiling. This technical resistance is proving difficult to breach, and with bearish structural forces gathering momentum, the outlook for crude remains cautious at best.

One of the key factors keeping oil bulls at bay is the anticipation of another production increase from the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+. Market sources indicate that the group is likely to proceed with a fourth consecutive monthly hike, adding another 411,000 barrels per day to global supply. While this strategy is part of a gradual unwinding of pandemic-era production cuts, the timing has raised eyebrows given the broader economic backdrop.

Indeed, demand-side indicators continue to flash warning signs. China’s National Bureau of Statistics reported that the country’s official manufacturing PMI contracted for a third straight month in June, reflecting deepening weakness in factory output and domestic demand. This contraction is particularly significant, given that China remains the world’s largest oil importer. The PMI data, coupled with a murky trade environment and lackluster export orders, suggests that Chinese crude demand may continue to underperform in the near term.

In the United States, the economy unexpectedly shrank in Q1, and although some indicators have since stabilized, uncertainty around consumer demand and industrial activity remains high. Meanwhile, the Eurozone continues to grapple with stagflationary pressures, with industrial output in key economies like Germany and France showing signs of fatigue. Together, these factors paint a picture of a sluggish global economy, ill-suited to absorb additional barrels coming onto the market.

Further limiting the upside for crude is the apparent de-escalation of tensions in the Middle East. U.S. President Donald Trump announced over the weekend that a ceasefire agreement between Israel and Iran had been reached, bringing a tentative end to a 12-day conflict that had briefly raised concerns over a broader regional war and potential supply disruptions.

While geopolitical risk premiums had spiked during the height of the conflict—especially given Iran’s strategic position near the Strait of Hormuz, a critical artery for global oil shipments—the easing of tensions has removed a key source of support for oil prices. That said, skepticism remains. A U.S. intelligence report cited by Reuters noted that recent American strikes on Iranian nuclear sites only marginally set back Tehran’s program. Iranian officials have also signaled that the country’s nuclear efforts remain intact, underscoring that the situation could re-escalate quickly.

Still, for now, the market appears to be pricing in a stable geopolitical environment, diminishing the need for risk hedging via oil futures.

In a separate development that underscores the fragile state of the broader energy sector, Prax Group’s holding company, State Oil, has reportedly entered administration. According to multiple market sources, the company—which owns oilfields in the Shetland Islands and operates hundreds of petrol stations across the United Kingdom—was forced to take the step after accumulating unsustainable losses. An official announcement is expected later on Monday.

This development, while isolated, highlights how high operational costs, narrowing margins, and shifting market dynamics are impacting even vertically integrated players in the oil value chain.

Technical Analysis

From a technical standpoint, WTI crude is currently locked in a narrow consolidation range. Despite attempts to stabilize around $65.00, the broader bias remains to the downside. Price action continues to occur below the 50-period Exponential Moving Average (EMA), signaling ongoing bearish pressure. Furthermore, the current pattern appears to be forming a distribution phase, with traders awaiting a breakout that could define the next directional move.

A key support level lies at $64.00, and a confirmed break below this threshold would likely trigger a retest of $62.00, followed by deeper targets at $60.00 and $57.00. These levels coincide with prior consolidation zones and Fibonacci retracement levels, offering potential checkpoints for bearish momentum.

Traders with a short bias are reportedly positioning around these technical levels. As of Monday, some are entering short positions at $64.00, targeting a move down toward $57.00 over the coming sessions, provided fundamental headwinds continue to outweigh geopolitical tailwinds.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 64.00

STOP LOSS: 66.00

TAKE PROFIT: 57.00

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

The dollar is under pressure amid concerns over Federal Reserve independence and ballooning U.S. fiscal deficits. While a technical rebound has emerged, resistance remains formidable, with analysts projecting further downside.

BUY USDX

Close Time

CLOSED

96.500

Entry Price

100.200

94.600

98.860 -0.090 -0.09%

67.0

Pips

Profit

94.600

97.170

Exit Price

96.500

Entry Price

100.200