Gold (XAUUSD) Consolidates Below Key Resistance as US Dollar Strengthens on Tariff Delay

Gold (XAUUSD) prices dropped after hitting the resistance at $3,360, following US President Donald Trump’s decision to delay the 50% tariffs on European Union goods until July 9. The move boosted risk appetite and pushed global equities higher. As a result, safe-haven demand for gold weakened sharply.

On the other hand, the US Dollar Index (DXY) rebounded to 99.60, supported by a significant increase in consumer confidence. The strong consumer data signaled resilience in the US economy and lowered expectations for immediate Fed easing. The rebound in the US dollar added further pressure on gold prices.

However, other economic indicators painted a mixed picture. Durable Goods Orders fell by 6.3% in April, as shown in the chart below. This was the sharpest drop since October, although better than the forecasted 7.8% decline.

Uncertainty around tax and trade policies weighed on business investment. Meanwhile, the 10-year Treasury yield dropped six basis points to 4.446%, and real yields declined to 2.116%, slightly cushioning gold’s losses. Still, the combination of rising consumer sentiment and a stronger dollar had a greater influence in pushing gold lower.

Despite the correction, gold’s long-term outlook remains bullish. Moody’s downgrade of US debt from AAA to AA1 highlights growing fiscal risks. Additionally, traders are pricing in 46.5 basis points of Fed easing by year-end.

China sharply increased its gold imports via Hong Kong in April, marking the highest monthly inflow since March 2024. These factors suggest that while gold faces short-term pressure, structural support remains strong due to fiscal concerns and rising physical demand.

Gold (XAU) Technical Analysis

Gold Daily Chart – Descending Channel

The daily chart for gold shows that the price has reached the resistance of the descending channel and is correcting lower. This pullback highlights the significance of the resistance near $3,360. A break above $3,370 could trigger another move toward $3,500.

Gold 4-Hour Chart – Descending Channel

The 4-hour chart also shows consolidation after hitting the resistance of the descending channel around the $3,360 area. However, the formation of an inverted head and shoulders at the bottom of the descending channel suggests that this correction could be a buying opportunity. Failure to hold support at $3,245 may indicate further downside toward the $3,000 zone.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Key Resistance

The daily chart for the 10-year US Treasury yield shows that yields are dropping after hitting the 4.62% resistance. However, the yield remains above the 50-day and 200-day SMAs, indicating continued positive momentum.

Moreover, the RSI is above the mid-level, reflecting a bullish development. A break above 4.70% would signal a potential move toward the 5.00% area.

10-Year Treasury Note Yield 4-Hour Chart – Consolidation

The 4-hour chart also shows consolidation between the 4.00% and 4.80% range. The pullback from 4.60% remains within a bullish context. As long as 4.10% holds, the consolidation is likely to continue.

US Dollar (DXY) Technical Analysis

US Dollar Daily – Rebound

The daily chart for the US Dollar Index shows that the index is trading near the support zone between 99 and 100. The failure to break above the 50-day SMA indicates strong bearish pressure. A break below 98 could trigger a sharp decline toward the 90 area.

However, a break above the 102 level would signal further upside toward 103.50. The formation of a head and shoulders pattern indicates a bearish trend, and any rebound is likely to be limited. However, the rebound from the 98–99 support zone has kept the US dollar directionless in the short term.

US Dollar 4-Hour Chart – Descending Channel

The 4-hour chart for the US Dollar Index shows that the index is trading within a descending channel. The price is consolidating between the 98 and 102 levels. A break of either level will signal the next directional move.