Gold News: Trump Tariffs Lift Gold to $3375.09 Before Sellers Regain Control

Gold Pulls Back After Brief Breakout as Traders Eye Fed, Tariffs

Gold prices eased on Monday after briefly surging to a three-week high on safe-haven demand sparked by fresh tariff threats from U.S. President Donald Trump. The metal had attempted a breakout above $3365.92, but a lack of follow-through buying led to a retreat, raising questions about near-term direction for XAU/USD.

At 12:55 GMT, XAU/USD is trading $3352.82, down $2.845 or -0.08%.

Trump’s Tariff Threats Drive Safe-Haven Demand, Then Fade

Gold initially rallied following Trump’s announcement over the weekend that he plans to impose a 30% tariff on most imports from the European Union and Mexico starting August 1.

The geopolitical tensions briefly lifted gold as investors sought protection from trade uncertainty. However, the move lost momentum as buy stops were triggered, and without strong institutional demand above $3365.92, gold reversed lower.

The EU called the proposed tariffs “unfair and disruptive” but opted to extend its suspension of countermeasures until early August in hopes of negotiating a resolution. Mexico echoed similar sentiments. While the risk-off tone initially supported bullion, the lack of escalation or concrete actions tempered the rally.

Traders Look to Fed Rate Cut Hopes for Next Catalyst

Markets are now focusing on upcoming U.S. inflation data, with the Consumer Price Index (CPI) and Producer Price Index (PPI) reports due later this week. These releases are key to shaping expectations around Federal Reserve policy. Traders currently expect up to 50 basis points in rate cuts by year-end, with the first likely in October.

Lower interest rates tend to weaken the dollar and reduce the opportunity cost of holding non-yielding assets like gold, offering medium-term support. According to UBS commodity analyst Giovanni Staunovo, the combination of policy uncertainty and geopolitical risks continues to underpin the safe-haven appeal of gold.

Technical Levels in Focus as Bulls Await Confirmation

Gold’s failed breakout above $3365.92 suggests the move was driven more by short covering than fresh buying. The immediate support zone sits at the pivot of $3347.97, followed by the 50-day moving average at $3326.20, which continues to support the intermediate trend. A sustained move above $3365.92 would open the door toward the next resistance at $3451.53.

Gold Prices Forecast: Bullish Bias Holds with Key Levels in Play

While the pullback reflects short-term hesitation, the broader outlook remains bullish as long as prices hold above the 50-day moving average. Upcoming inflation data and Fed rate expectations will be key drivers. A decisive break above $3365.92 with strong volume could spark a renewed push toward $3451.53. Until then, traders should watch for support retests around $3347.97 and $3326.20.

More Information in our Economic Calendar.