Gold News: Tariffs and Fed Drama Dominate—Is a Bigger Gold Price Catalyst Ahead?

Gold Holds Steady as CPI Matches Forecasts and Tariff Concerns Mount

Gold prices edged lower on Tuesday as traders weighed a mix of inflation data, dollar strength, and renewed trade war threats. While U.S. Consumer Price Index (CPI) data showed a modest increase, the market remained focused on potential catalysts such as tariffs and upcoming Producer Price Index (PPI) data.

The U.S. dollar ticked higher, supported by rising Treasury yields and investor positioning near technical resistance. The Dollar Index (DXY) hit 98.324 intraday, approaching its 50-day simple moving average at 98.80. A close above that level would signal a possible extension toward the June 23 high of 99.421. With price support near 97.899, the dollar’s momentum continues to pressure gold from the top side.

Federal Reserve Caught Between CPI Data and Political Heat

Tuesday’s inflation report reinforced the market’s expectation that the Federal Reserve will not act at its July meeting. Headline CPI rose 0.3% month-on-month, lifting the annual pace to 2.7%. Core CPI rose 0.2% on the month, matching the 2.9% yearly estimate. The FedWatch tool shows only a 2.6% chance of a rate cut this month, but September remains in focus with markets pricing in 50 basis points of easing by year-end.

Fed independence is also under the microscope after the Trump administration confirmed it is reviewing whether President Trump can lawfully remove Chair Jerome Powell. Though no immediate action is expected, the threat alone introduces policy uncertainty that could influence market sentiment and future rate pricing.

Trade War Threats Keep Gold’s Safe-Haven Status Relevant

President Trump’s renewed threat to impose tariffs of up to 30% on European Union and Mexican imports kept a bid under gold, even as it struggled to break higher. Geopolitical and trade tensions continue to offer a floor for prices, especially with no resolution in sight. These risks have historically supported gold’s role as a defensive asset during global economic stress.

Gold Prices Forecast: Still Range-Bound, But Bulls Remain Positioned

Gold remains confined within a familiar range that has held since mid-May.

Independent trader Tai Wong noted, “Gold should be perkier… we need a new driver to push gold back up past $3,400.”

Until then, gold remains tethered to dollar strength and interest rate speculation. Strategists like Zaner Metals’ Peter Grant remain bullish, citing ongoing uncertainty and eventual easing prospects.

With CPI data not offering a breakout trigger, all eyes now turn to Wednesday’s PPI release and fresh Fed commentary. Should the dollar break above 98.80 and Fed rate cut bets retreat further, gold could face additional downside pressure. Conversely, any dovish surprise or escalation in trade rhetoric may reignite upside potential.

Outlook: Neutral-to-Bullish — Gold remains supported by trade tensions and expectations for Federal Reserve easing, but a firm U.S. dollar and uncertainty around the timing of rate cuts may limit near-term upside. A breakout above recent range highs will likely require a fresh catalyst.

More Information in our Economic Calendar.