Gold News: Bullish Momentum Builds with DXY Weakness and August Tariff Countdown

Gold Climbs as DXY Slips; Traders Brace for Fed, Tariffs, and Trade Talks

Gold prices edged higher on Monday, supported by a softer U.S. dollar and a dip in Treasury yields, as traders look ahead to major catalysts including the Federal Reserve’s policy meeting and the looming August 1 U.S. tariff deadline.

At 11:38 GMT, XAU/USD is trading $3371.77, up $21.67 or +0.65%.

The U.S. Dollar Index (DXY) fell 0.2%, making gold cheaper for holders of other currencies. The move followed comments from U.S. Commerce Secretary Howard Lutnick, who confirmed tariffs will begin on August 1 unless trade deals with partners, including the EU, are finalized. While he emphasized continued negotiations post-deadline, the short-term pressure has buoyed demand for safe-haven assets.

Weaker Dollar and Treasury Yields Offer Gold a Lift

With Treasury yields also trending lower—10-year yields down over 5 basis points to 4.374%, and 2-year yields falling to 3.85%—the appeal of non-yielding assets like gold improved.

The Fed’s blackout period ahead of next week’s FOMC meeting means investors are left parsing past commentary. Notably, Fed Governor Christopher Waller signaled support for a rate cut, a view that could gain traction despite last month’s decision to hold rates steady.

Rate cut expectations remain tempered, with ANZ analysts noting that elevated inflation and solid U.S. data have capped market pricing for multiple cuts. However, a persistent “buy-on-dip” approach continues to limit gold’s downside, reflecting cautious optimism around easing monetary conditions.

Gold’s Technical Breakout Levels in Focus

From a technical perspective, gold is showing bullish momentum. The metal is trading above key support at $3327.50 (50-day MA) and the pivotal $3347.97 level.

A confirmed breakout over $3377.66 could open the door to accelerated buying, with little resistance until $3451.53. This setup suggests a short-term upside bias, especially if DXY continues to soften.

Fed Policy, Economic Data, and Tariff Clock Set the Stage

This week’s U.S. data calendar is light, but key readings—June’s leading indicators (Monday), Powell’s speech (Tuesday), home sales (Wednesday), and durable goods orders (Friday)—could shift sentiment. Meanwhile, the tariff deadline looms large, with global investors eyeing U.S.-EU developments and potential disruptions to trade.

Market Forecast: Cautious Bullish Tilt in Gold as DXY Faces Pressure

The current environment favors continued gold strength, particularly if the Fed signals a pivot or if U.S. economic data underwhelms. DXY weakness, falling yields, and tariff uncertainties all provide tailwinds.

Unless the dollar finds support from strong U.S. data or hawkish Fed language, gold may attempt a breakout toward $3450, reinforcing downside risk for the DXY.

More Information in our Economic Calendar.