Morning Note: Gold Rises on Tariffs; Japan Vote Shake-Up; Tesla Gains

Gold Rises on Tariff Tensions, Fed Outlook in Focus

Gold prices climbed to around $3,350 per ounce on Monday as market jitters over President Donald Trump's tariff agenda intensified. U.S. Commerce Secretary Howard Lutnick reaffirmed on Sunday that August 1 marks a firm deadline for implementing the so-called reciprocal tariffs. However, he noted that trade negotiations could continue past that point. He added that smaller nations might face a baseline tariff of 10%. This follows Trump’s earlier letters to various trading partners, which outlined upcoming tariff rates, some as steep as 40%.

Despite rising geopolitical tensions, strong U.S. economic data released last week has eased expectations of an immediate interest rate cut by the Federal Reserve, capping gold’s further upside. Investors now turn their attention to upcoming remarks from Fed Chair Jerome Powell and Governor Michelle Bowman, hoping for clearer guidance on the central bank’s policy direction.

(Gold Daily Price Chart, Source: Trading View)

From a technical analysis perspective, the gold price chart rebounded from the support zone of $3,230 – $3,250 on 30 June 2025, forming a series of higher highs and higher lows. On 17 July, it swept the liquidity low from 10 July at $3,310.01 before rebounding. This bullish movement may continue, potentially pushing the price higher to target the previous liquidity high at $3,377.27, formed on 16 July 2025.

Japan Vote Jolts Coalition Ahead of U.S. Tariff Deadline

Japan’s upper house election on Sunday delivered a major setback to the ruling coalition, raising concerns over potential policy gridlock and a growing fiscal deficit, factors that analysts say are largely priced in. The coalition’s loss of control in the upper house has further weakened Prime Minister Shigeru Ishiba’s political standing. Still, he pledged to stay on as party leader, citing the urgency of reaching a tariff agreement with the U.S. before the August 1 deadline.

Although Japanese markets were closed on Monday for a public holiday, gains in the yen and Nikkei futures suggest investors had already anticipated the outcome. The yen, which has weakened significantly this year amid expectations of tax changes and higher fiscal spending, saw a brief rebound. While the election result wasn’t a complete surprise, it comes at a critical time as Japan races to secure a trade deal with U.S. President Donald Trump.

(GBP/JPY Daily Chart, Source: Trading View)

From a technical analysis perspective, the GBP/JPY currency pair has been in a bullish trend since April 2025, as indicated by a series of higher highs and higher lows. More recently, the pair swept the previous liquidity high at 199.814 and then retraced lower. This valid temporary bearish movement could potentially drive the pair down to retest the order block between 197.90 and 198.30.

Tesla Rises as U.S. Slaps Heavy Tariffs on Graphite

Tesla shares jumped 3% last Friday, extending their weekly gains, as investors reacted to new U.S. trade restrictions on a key electric vehicle (EV) battery material. The U.S. Commerce Department imposed a 93.5% anti-dumping duty on specific graphite imports from China, citing below-market pricing. With existing tariffs, total levies on some graphite products could now reach as high as 160%. Graphite is a crucial input for EV batteries, with each vehicle using an estimated 100–200 pounds.

Despite concerns over rising input costs, analysts believe the impact on EV pricing will be limited. China remains the dominant graphite supplier, accounting for about 75% of global production as of 2024, according to the U.S. Geological Survey.

(Tesla Daily Share Price Chart, Source: Trading View)

From a technical analysis perspective, Tesla's share price has rebounded from the swap zone of $275 – $295, reinforcing this area as a solid support zone after multiple past reactions. This valid bullish movement could potentially drive the price higher to retest the resistance zone of $355 – $365. If the price breaks above this resistance, a further surge may follow. Conversely, failure to break through could result in a pullback and a period of consolidation.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed as investment advice.