Gold (XAU/USD) is back in positive territory, up nearly $60 as the U.S. Dollar is weighed down by trade uncertainty and concerns about the fiscal health of the United States. Gold is now testing key resistance at $3,365 with bullish traders eyeing further gains toward $3,415 and May’s high at $3,440.
Trade Tensions and Debt Woes Spark Safe-Haven Demand
Market sentiment has turned risk-averse following comments from former President Donald Trump, who proposed doubling tariffs on steel and aluminum while escalating trade tensions with China over critical minerals.
These developments have reignited fears of stagflation, with investors bracing for slower economic growth and rising inflation. Meanwhile, concerns over proposed tax cuts and ballooning U.S. debt have reinforced the “sell America” narrative, driving increased demand for gold as a safe-haven asset.
Bullish Momentum Builds
Gold has likely completed last week’s brief correction and is now set to resume its broader uptrend. Immediate resistance is seen at $3,365, with a confirmed breakout likely opening the door to $3,415. Beyond that, bulls may aim for May’s high near $3,440.
On the downside, initial support lies near $3,285, followed by a secondary floor at $3,245, which could limit any short-term pullback.
Conclusion
Traders will be watching today’s U.S. ISM Manufacturing PMI release and Federal Reserve Chair Jerome Powell’s comments for further clues on economic momentum and potential shifts in monetary policy. A dovish tone or signs of weakening data could deepen the Dollar’s slide, providing more fuel for the gold rally.
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