Gold (XAUUSD) Price Forecast: Gold Market Eyes Breakout on Dollar Dip, Tariff Fears

Gold Eyes Weekly Gain as Dollar Index Dips Again

Gold prices rebounded Friday, set for a weekly gain as the U.S. dollar weakened and traders turned to safe-haven assets ahead of the July 9 tariff deadline tied to President Donald Trump’s trade policy. The dollar index (.DXY) slipped 0.2% Friday, positioning for its second weekly decline, and making gold more affordable for holders of other currencies.

“The apprehension about the fiscal situation in the U.S. after Trump’s sweeping tax-cut bill passed Congress, alongside the tariff uncertainty, is boosting safe-haven demand,” noted Ricardo Evangelista at ActivTrades.

Trump’s administration is shifting to a broader tariff strategy, moving from plans for individual deals to sending letters to multiple countries Friday, reinforcing the market’s caution. Earlier, Trump announced reciprocal tariffs between 10%-50%, later lowering most to 10% until July 9 to allow negotiations, increasing traders’ focus on potential trade escalations.

Trump Tax Cuts and U.S. Job Data Stir Market Sentiment

Trump’s tax-cut legislation cleared its final Congressional hurdle Thursday, making 2017 tax cuts permanent, funding immigration enforcement, and adding new campaign-promised tax breaks. Traders are monitoring the fiscal backdrop, with uncertainty over the longer-term budget impact providing underlying support for gold.

Meanwhile, U.S. nonfarm payrolls for June showed stronger-than-expected headline growth, but nearly half the gains came from government hiring, with private sector job growth the slowest in eight months. This mixed data adds complexity to the Federal Reserve’s rate path outlook.

“The latest payrolls support a slowing economy without stalling, reducing the immediate pressure on the Fed to cut rates,” said Giovanni Staunovo at UBS.

Gold Prices Forecast: Tight Range Signals Impending Volatility

Technical analysis shows gold trading within a tight band, with resistance at $3347.97 and support around the 50-day moving average at $3321.80. This compression indicates investor indecision while setting the stage for potential volatility as markets approach the July 9 tariff trigger.

The weakening dollar trend and safe-haven demand linked to Trump’s trade deadlines support gold’s upside in the near term. Traders should watch for price action around the $3348 resistance, where a breakout could signal renewed bullish momentum, especially if the dollar index extends its decline.

Outlook: Bullish Bias Maintained Above Key Support

Given the dollar’s continued weakness, solid underlying safe-haven demand, and a tight technical setup, gold maintains a bullish bias above $3321.80. A close above the $3347.97 resistance pivot could open further gains, while failure to hold above the 50-day moving average at $3321.80 may invite short-term retracements.

or now, the dollar’s retreat and market caution ahead of the July 9 tariff deadline keep gold supported on dips, favoring buying on weakness in the coming sessions.

More Information in our Economic Calendar.