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Gold pulls back after testing Fibonacci resistance amid Trump's renewed tariff threats.
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Safe-haven demand boosts bullion ahead of Tuesday’s U.S. inflation data release.
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XAU/USD bullish breakout shifts focus toward the key $3,400 psychological resistance level.
Gold (XAU/USD) is consolidating within a narrow range between $3,350 and $3,370 on Monday, as markets digest renewed tariff threats from the United States. At the time of writing, XAU/USD is hovering near $3,355, with bulls eyeing the key psychological resistance at $3,400.
The latest geopolitical spark comes from U.S. President Donald Trump’s announcement of potential 30% tariffs on imports from the European Union and Mexico, set to take effect on August 1. This development has driven renewed safe-haven demand for gold, especially amid broader concerns of escalating trade tensions.
Trump’s Tariff Push Fuels Risk Aversion
- President Trump issued formal letters over the weekend to European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum, warning of imminent tariffs. The move has raised the possibility of a new wave of blanket trade penalties, adding geopolitical uncertainty and providing upward momentum for gold prices.
- According to Reuters, a total of 23 countries have received similar warnings. The highest confirmed tariff so far stands at 50% on Brazilian imports. Trump further escalated concerns through a Truth Social post, warning the EU that any retaliatory measures would be matched with additional tariffs, stating: “Whatever the number you choose to raise them by … will be added onto the 30%."
- In response, the European Commission issued a formal statement expressing readiness to negotiate but also promising "proportionate countermeasures" if necessary.
- Investors now turn their attention to a loaded Tuesday economic calendar. The U.S. Consumer Price Index (CPI) for June will offer fresh insight into inflation trends and whether recent tariff threats are beginning to affect prices. This data will be closely watched by the Federal Reserve, as it may influence future policy decisions.
- Simultaneously, China’s second-quarter GDP, along with Industrial Production and Retail Sales figures for June, are also due. Any signs of slowing economic activity from the world’s second-largest economy could further bolster gold’s appeal as a hedge.
Technical Outlook: Bulls Eye $3,400, Momentum Remains Firm
From a technical standpoint, Gold has broken out of a symmetrical triangle on the daily chart, signaling a potential continuation of bullish momentum. The breakout above the upper trendline and the 20-day Simple Moving Average (SMA) at $3,340 supports the bullish case.
Price action is currently testing the 23.6% Fibonacci retracement of the April swing low to the recent high, near $3,371. A sustained close above this level would bring the $3,400 resistance into focus.
Should XAU/USD breach $3,400, the next targets lie at the June high of $3,452, followed by the all-time high near $3,500 recorded in April.
On the downside, support rests at the 50-day SMA near $3,327. A decisive move below this level could expose the $3,300 psychological support.
The Relative Strength Index (RSI) stands at 56, indicating bullish momentum without yet reaching overbought conditions—leaving room for further gains in the near term.
Gold remains in a holding pattern as traders brace for high-impact data and mounting geopolitical risks. With safe-haven demand supported by escalating U.S. tariff threats and key macro releases on deck, XAU/USD could be poised for a decisive move in the coming sessions.
