Gold (XAU/USD) holds a modest positive tone on Thursday, recovering from recent lows and trading above the psychological $3,300 threshold. Despite this rebound, bulls remain cautious, with upside momentum lacking conviction as conflicting forces continue to shape the outlook.
Safe-Haven Demand Reignited by Trump’s Tariff Blitz
The resurgence in Gold prices is underpinned by a fresh wave of risk aversion stemming from US trade policy turbulence. President Donald Trump’s announcement of tariff notices to eight smaller trading partners — along with a firm stance against extensions — sparked concerns over a potential global economic fallout.
Further intensifying market anxiety, Trump unveiled a 50% tariff on copper imports, effective August 1. This bold move not only sent industrial metals into a tailspin but also triggered follow-through flows into safe-haven assets like Gold, which historically benefits during periods of geopolitical and trade tension.
Market participants are now reassessing the broader economic implications of these tariffs, particularly in the context of already fragile global growth. The uncertainty has pushed investors into defensive positioning, supporting the precious metal.
Weakening US Dollar Offers Tailwind for Gold
The US Dollar (USD), which peaked at a two-week high earlier this week, has slipped back amid falling Treasury yields and cautious Federal Reserve signals. The pullback in the greenback has provided an additional boost to Gold, which is priced in dollars and becomes cheaper for foreign investors when the USD weakens.
Specifically, the Dollar Index (DXY) has retreated as investors absorbed the dovish undertones from the latest FOMC Minutes, despite recent strength in US labor market data. The softening dollar aligns with the broader narrative of market hesitancy, lending modest support to bullion.
Bond Market Signals Cooling Rate Hike Fears
Another key pillar supporting Gold is the behavior in the US Treasury market. The 10-year government bond auction on Wednesday saw strong demand, sending yields lower and reinforcing expectations that the Fed may lean toward rate cuts later this year.
Lower yields diminish the opportunity cost of holding non-yielding assets like Gold, thereby improving its relative attractiveness. The dovish tone from the FOMC Minutes, though not overtly committed to immediate rate cuts, hinted that most participants favor easing later in 2025, especially if trade-induced inflation proves transient.
FOMC Minutes Reveal Fed Divided, Not Dovish Enough for Bulls
Despite recent support, the lack of strong bullish conviction in the Gold market can be partly explained by the mixed signals from the Federal Reserve. According to the Minutes from the June 17–18 meeting, only a few officials supported immediate rate cuts, citing concerns about premature action in the face of persistent inflation risks from trade tariffs.
Others argued that no cuts might be necessary at all. However, the majority of Fed officials agreed that easing would be appropriate later in the year, provided inflation pressures fade and economic momentum softens further.
This cautious, conditional stance prevents Gold bulls from committing heavily, especially with US economic data still holding up relatively well.
Mixed Macro Picture Creates Tug-of-War
The broader macro backdrop remains a complex mix of softening inflation expectations, persistent geopolitical uncertainty, and resilient US economic indicators. Last week’s Nonfarm Payrolls surprised to the upside, showing solid job gains for June and prompting traders to scale back expectations for multiple rate cuts this year.
At the same time, core inflation remains sticky, and tariff-induced price pressures complicate the Fed’s balancing act. Traders now await US Weekly Jobless Claims data and upcoming Fed speeches to assess how labor market trends and Fed language evolve in light of ongoing trade developments.
Technical Analysis: Bulls Need Break Above $3,345 to Confirm Reversal
On the technical front, Gold has managed to stabilize above the $3,300 level but remains trapped below key resistance near $3,345–$3,346 — the recent weekly high. A convincing break above this zone is needed to confirm a near-term bottom and unlock further upside potential.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult a professional advisor before making investment decisions.
[sc_fs_multi_faq headline-0=”h2″ question-0=”Why is Gold trading above $3,300 right now?” answer-0=”Gold is being supported by rising trade tensions due to new US tariffs, a weaker US Dollar, and falling Treasury yields. These factors drive safe-haven demand and make non-yielding assets like Gold more attractive. ” image-0=”” headline-1=”h2″ question-1=”What did the Fed Minutes say about interest rate cuts?” answer-1=”The June FOMC Minutes revealed that only a few officials support immediate rate cuts. However, most members expect easing later in the year, especially if inflation pressures from tariffs are temporary.” image-1=”” headline-2=”h2″ question-2=”What key level must Gold break for a bullish confirmation?” answer-2=”Gold needs to break and sustain above the $3,345–$3,346 resistance zone to confirm a bullish reversal and aim for the $3,375–$3,400 range.” image-2=”” count=”3″ html=”true” css_class=””]
Immediate support lies near $3,283–$3,282, where the yellow metal found a floor earlier this week. Below that, $3,270 could come into focus. On the upside, a clean break above $3,346 would open the doors to a test of $3,375 and possibly the $3,400 mark.
Momentum indicators like the RSI and MACD on the 4-hour chart remain neutral, reflecting the indecision in the market.
What Could Trigger the Next Major Move?
The next directional impulse in Gold may come from a combination of:
- US inflation data (CPI, PPI)
- Fed official commentary
- Labor market updates (NFP, Jobless Claims)
- Escalation or resolution in trade disputes
- Geopolitical risks in the Middle East or Asia
If data supports the view that the Fed will ease rates sooner — or if tariffs materially weaken global demand — Gold could break out decisively to the upside. Conversely, a stronger USD or a hawkish Fed pivot could weigh on bullion.
Conclusion: Gold Holds Steady But Bulls Need More Conviction
Gold prices are holding a cautious bid above $3,300 amid a confluence of trade policy uncertainty, Fed caution, and weaker yields. However, the path forward remains murky due to the Fed’s hesitancy on near-term rate cuts and ongoing resilience in US macro data.
Until traders receive more clarity on rate direction or fresh geopolitical shocks, XAU/USD may remain range-bound, with upside attempts capped by technical and policy resistance. A breakout above $3,345 would be the first signal that bulls are ready to retake control.
