Gold prices dropped significantly on Tuesday, influenced by a combination of seasonal slow trading and rising global trade tensions. In a typically quieter summer market, many short-term traders chose to liquidate their long positions in gold futures, leading to a notable dip in prices. August gold futures fell by $34.50, settling at $3,308.10, while September silver prices also declined by $0.299, closing at $36.605.

One of the main pressures came from recent political moves—particularly new tariffs announced by former U.S. President Donald Trump on countries like Japan and South Korea. These tariffs, along with threats of broader global trade restrictions, caused uncertainty in the market and dampened risk appetite. As a result, some investors became cautious and began reducing their exposure to gold and silver.

Meanwhile, other key market factors showed mixed signals. The U.S. dollar index was slightly higher, crude oil prices were firm at around $68.50 per barrel, and the yield on 10-year U.S. Treasury notes stood at 4.421%. These conditions further added to the cautious tone in the metals market.

From a technical perspective, gold still holds some short-term advantages. For a bullish reversal, gold would need to break above $3,400.00. On the downside, if prices fall below $3,200.00, more selling pressure may emerge. Silver’s performance was also choppy, with bulls aiming to push prices above $37.73, while support remained at $35.00.

Overall, both metals are at a crossroads. Without fresh, strong fundamental news, it will be difficult for gold or silver to regain upward momentum in the near term.