Trade Tensions Ignite Gold Buying as Spot Approaches Key Resistance
Gold prices jumped nearly 1% on Friday, with spot gold last trading at $3,355.66 as traders responded to renewed trade war fears triggered by fresh tariffs from former U.S. President Donald Trump. The move marked a sharp intraday rally as gold reclaimed ground above its 50-day moving average (currently $3,325.80) for the first time in over two weeks, signaling a short-term shift in momentum back in favor of the bulls. U.S. gold futures settled even stronger, closing at $3,371.20.
Trump announced a 35% tariff on Canadian imports starting August 1 and floated blanket tariffs of 15%-20% on most other trading partners. He also imposed a 50% duty on goods from Brazil, including key industrial materials like copper. These aggressive measures rattled global markets and sparked a wave of safe-haven buying across precious metals, with silver hitting a 13-year high.
Fed Rate Cut Speculation Limits Yield Upside, Lifts Bullion Appeal
While Treasury yields climbed modestly on Friday—10-year yields up 7 bps to 4.417% and 30-year yields up 9 bps to 4.955%—real yields remain low and continue to favor non-yielding assets like gold. Market participants are now pricing in two rate cuts from the Federal Reserve by year-end, following dovish commentary from Fed Governor Christopher Waller.
The dollar gained modestly as risk aversion intensified, with the dollar index slightly firmer and USD/JPY rising to 147.40. However, the greenback’s upside remains constrained given expectations of looser monetary policy and growing trade-related uncertainty.
Chart Watch: Gold Reclaims 50-Day Moving Average in Bullish Push
Friday’s close above the 50-day moving average adds technical weight to gold’s recovery. After holding support near $3,282.66 and $3,244.41 earlier this month, bulls are eyeing a test of near-term resistance at $3,365.92. A clear break above that level would expose June’s peak at $3,451.53, with $3,500.20 marking a key upside target.
Price action in recent weeks shows a consolidation between $3,100 and $3,500, in line with forecasts from State Street Global Advisors. As long as gold stays above the 50-day SMA and maintains momentum above $3,310, traders may continue favoring upside setups.
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See all Gold forecastsGold Prices Forecast: Bullish Outlook Holds Above Technical Support
With trade tensions escalating, rate cut expectations rising, and spot gold closing above its 50-day moving average, the bias remains tilted to the upside. Traders should watch for a sustained breakout above $3,366 to confirm a push toward $3,451.33 and potentially $3,500.20.
Support remains firm at $3,244 and $3,228. Unless the dollar strengthens significantly or rate cut odds fade, gold is likely to remain well bid in the near term. The gold prices forecast remains bullish, supported by both technical structure and macro drivers.
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