Gold will attempt to return to its upward trend and 3400 level

At the beginning of last week, gold prices fell out of their seven-month upward trend. However, there was no obvious negative reaction to this event. While the active phase of growth in the price of gold has paused, there has been no transition to a sustained decline in prices. Gold buyers are confidently holding the $3,300-per-ounce level, from which an upward rebound is developing. This movement could help prices rise above the trend line and approach the $3,400 mark.

According to Reuters analysts, gold and other safe-haven assets will become increasingly popular as August 1 approaches. On that day, higher tariffs on imports from many countries are set to take effect. The main focus is now on negotiations with the EU, in which no tangible progress has been made so far. According to Bloomberg sources, the US does not agree to a minimum tariff rate of 10%, and European officials have already begun preparing a plan of retaliatory measures against the US.

Against this backdrop, investors around the world continue to increase the share of gold in their portfolios. Based on the latest reports from the World Gold Council (WGC), demand for the precious metal remains steady in the Indian and Chinese markets. The decline in jewelry consumption is fully offset by active purchases of bullion and coins, as well as increased investments in ETFs. The central banks of these countries are also increasing their gold reserves.

Moreover, Asian countries may soon face serious competition. According to the Financial Times, Donald Trump is drafting legislation that would permit US pension funds to invest in cryptocurrencies and precious metals. By the end of the first quarter of this year, Americans had approximately $8.7 trillion in their pension accounts. Even if only a small portion of this amount is invested in gold, prices could rise sharply.

If prices rise above the trend line, it will be a strong signal for the bulls, and gold could quickly jump to the $3,400 level.

Consider the following trading strategy:

Buy gold at the current price. Take profit — 3,400. Stop loss — 3,310.