GLD ETF remains range-bound as risk-on mood offsets tariff jitters

The SPDR Gold Trust (GLD) has largely been in consolidation mode since April’s tariff-driven tantrum that bolstered gold price to $3,500 an ounce for the first time ever. The GLD gold ETF, which moves in tandem with the performance of the bullion, has held steady above the psychologically crucial zone of $300 while lacking enough bullish momentum to retest recent highs. 

Tariff jitters have heightened the demand for safe-haven assets ahead of the August 1 deadline. However, investors appear optimistic that Washington will engage in meaningful negotiations with its trade partners. At the same time, a weaker US dollar has made gold less expensive for buyers holding foreign currencies. 

Risk-on mood caps gold’s safe haven demand

Gold price has rallied by over a quarter year-to-date with geopolitical tensions and concerns over the impact of President Trump’s aggressive tariffs heightening demand for safe-haven assets. Notably, the bullion has held steady above the psychologically crucial zone of $3,000 since early April when the US imposed reciprocal tariffs on most of its trading partners. 

However, it has been range-bound in recent months as investors await a clear direction on trade talks, the Fed’s plan on interest rate cuts, and the extent of tariff-driven inflation. 

Interestingly, investors in the broader financial markets have maintained a risk-on mood despite the US tariffs’ August 1deadline. While the CMC fear & greed index has eased from last week’s greed level of 70 to 67, it is a significant shift from last month’s neutral of 40.  

According to the US Commerce Secretary, Howard Lutnick, August 1 is “a hard deadline”. Nonetheless, the risk-on sentiment points to the market’s optimism over successful negotiations with the country’s trading partners. 

Additionally, a weaker US dollar has made gold less expensive for buyers with foreign currencies. Wednesday marked the fourth straight session of losses for the dollar index as investors await cues on the Fed’s next move. Investors are increasingly betting on an interest rate cut in September. 

Ordinarily, an environment of lower interest rates favours gold price by lowering the opportunity cost of holding the non-yielding bullion. This forecast, coupled with concerns over the Fed’s independence, has been weighing on the US dollar while offering support to GLD gold ETF and other gold derivatives. 

GLD gold ETF technical analysis

The GLD gold ETF, which offers exposure to gold price, rebounded further on Tuesday to trade at a 6-week high amid heightened demand for safe haven assets. However, it remains range-bound, facing resistance at $315 as the risk-on mood shapes investors’ behaviour.  

A look at its daily chart shows the continuation of an uptrend as it holds steady above the 20 and 50-day EMAs. While the bulls remain in control, the asset will likely lack enough momentum to break the record-high of $317.70 hit during April’s tariff-driven tantrum. As such, GLD gold ETF will likely hover around $315 before pulling back to the resistance-turned-support level of $312. 

A further pullback will place the asset back to the tight range of between $302 and $312.This thesis will be valid for as long as the ETF remains above the psychologically crucial zone of $300.