Gold prices (XAU/USD) continued their streak for the second day in a row on Tuesday, climbing to a multi-day high at approximately $3,340 as the US Dollar deteriorated and New Haven demand rallied. The bullishness comes after a rebound from the $3,248-$3,247 region on Monday’s low, which was the lowest point in more than a month.
Traders appear to be convinced that the Federal Reserve (Fed) will continue its path of rate cuts, and now markets are leaning towards a September cut, which weighs on the U.S. Dollar at its lowest point since February 2022. As well, with lots of uncertainty surrounding President Donald Trump’s upcoming tariff decisions, demand for non-yielding assets, including gold, has surged.
Fed Rate Cut Bets Weigh on USD
Recent weak US economic data, particularly May’s unexpected drop in Personal Consumption Expenditures (PCE) has reinforced the view that the Fed may pivot toward policy easing. Markets are currently pricing in a 74% probability of a rate cut by September, with chances of a July cut still possible.
Trump’s Trade Pressure Boosts Safe-Haven Demand
President Trump has ramped up pressure on trade partners and the Federal Reserve. He threatened to raise tariffs as high as 50% if no “good faith” negotiations occur before the July 9 deadline. A procedural Senate vote also advanced Trump’s controversial $3.3 trillion “One Big Beautiful Bill”, sparking further fiscal uncertainty.
These developments are making investors jittery, reinforcing gold’s appeal as a hedge against both policy instability and inflationary risks.
Eyes on Key US Economic Data
Markets are waiting for important economic data releases in the U.S. today, including Tuesday’s ISM Manufacturing PMI and JOLTS job openings, with all eyes on Thursday’s critical Nonfarm Payrolls report as the next important input for the Fed’s next move. While equity markets show a risk-on tone, gold continues to receive some support from ongoing macroeconomic uncertainty and weakness in the U.S. Dollar.
XAU/USD Technical Analysis
As of now, gold has encountered resistance at $3,350. A breakout could open up the path to the $3,368 – $3,370 area resistance. Should the price close above this, we’re likely to see a continued move toward the psychological $3,400, which would reiterate the short-term bullish structure.
The downside support level is $3,300, with even stronger support levels at $3,277 – $3,276 and $3,245. If gold moves decisively below $3,200, it would put the more significant bullish bias into jeopardy, with $3,175 the next obvious target.
Also, despite the downside appearing challenged by the daily chart oscillators indicating negatively diverging patterns start hinting at possible consolidation, the overall trend remains upward until $3,200 gives way.
Conclusion
As the US Dollar retraces and macro uncertainty rises, gold continues to see safe-haven flows. If Thursday’s NFP report disappoints, this could translate into further bullish breakout above $3,400, which will only aid gold in its function as a hedge amid global uncertainty.
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