21 July 2025,04:02
Daily Market Analysis
21 July 2025, 04:02
*The Japan’s ruling party’s defeat in upper house elections erodes investor trust in the yen, fueling gold demand.
*With U.S.-EU negotiations faltering, markets brace for potential tariff fallout ahead of the August 1 deadline.
*Israeli strikes on Gaza deepen geopolitical risk, prompting a flight to safety.
The yellow metal appears to be regaining its luster as a perfect storm of political uncertainty and economic tensions drives investors toward traditional safe havens. After weeks of rangebound trading, gold is showing early signs of gathering bullish momentum amid deteriorating risk sentiment across global markets.
In Asia, Japan’s political landscape has been rattled by the ruling party’s historic defeat in upper house elections. While Prime Minister Kishida has vowed to remain in power, the political instability has undermined confidence in the yen’s safe-haven status, potentially redirecting capital flows toward gold. This shift comes at a critical juncture as currency markets reassess traditional risk-off assets.
Across the Atlantic, transatlantic trade relations face renewed strain as U.S.-EU negotiations remain deadlocked ahead of the August 1 tariff deadline. European officials are reportedly preparing emergency measures this week, with markets growing increasingly nervous about the potential for another disruptive trade war. The escalating tensions threaten to disrupt fragile supply chains and reignite inflationary pressures – conditions that historically favor gold’s appeal.
The Middle East remains a persistent flashpoint, with intensifying Israeli military operations in Gaza causing mounting civilian casualties and regional instability. These developments, combined with the broader geopolitical landscape, are reinforcing gold’s role as a crisis hedge.
The metal appears well-positioned to capitalize on any deterioration in risk sentiment, with the current convergence of political and economic uncertainties creating an ideal environment for its safe-haven qualities to shine.
Gold continues to trade within a tight range, with recent price action offering little clarity on direction. However, the metal remains supported above its ascending trendline, drawn from the prior series of higher lows—suggesting underlying strength in the uptrend.
While gold had been forming a lower-high pattern in recent sessions, the structure has now been broken, indicating a potential bullish reversal. A confirmed breakout above the previous high near $3,355 would reinforce bullish sentiment and open the door for further upside.
From a technical perspective, the RSI remains near the midpoint, reflecting a neutral momentum backdrop, while the MACD is hovering around the zero line, struggling to establish support—highlighting the lack of strong directional conviction in the immediate term.
Traders may look for confirmation above key resistance levels before positioning more aggressively on the long side.
Resistance levels: 3380.00, 3437.00
Support levels: 3300.00, 3223.00
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