Gold rebounds sharply after Trump remarks that an 80% tariff on China seems appropriate

Gold (XAU/USD) edges up by nearly 1.0% on Friday, trading back above $3,335 at the time of writing. The upward momentum follows remarks by US President Donald Trump, who called on China to open its markets to the US, stating that an 80% tariff on Chinese goods "seems right." Gold prices had already begun to recover in early trading as markets labeled the US-UK trade agreement announced on Thursday as an "empty shell."

The trade deal, which grants the US improved market access and a faster customs process for exports to the UK, has been criticized for falling short of the “full and comprehensive” deal that President Trump had promised. This underwhelming outcome has fueled skepticism just ahead of the high-stakes US-China summit set to take place in Switzerland over the weekend.

Market Sentiment Ahead of US-China Summit

• The poorly received US-UK trade deal has raised concerns and uncertainty ahead of the upcoming China-US summit. The Chinese Minister of Commerce has reiterated that tariffs must be lifted before any trade talks can commence. Meanwhile, President Trump suggested overnight that people should consider buying stocks, according to Reuters.
• President Trump expressed optimism about the upcoming trade talks with China, indicating that meaningful progress could be achieved. He mentioned that he might lower the 145% tariff imposed on many Chinese goods if discussions go well. However, Beijing has continued to push for the removal of unilateral US tariffs before negotiations can proceed, as reported by Bloomberg.
• Insiders familiar with the preparations for the Geneva talks, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, have indicated that the US aims to reduce tariffs below 60% as a first step, which they believe China might reciprocate. Positive developments during the two-day talks could result in the implementation of these reductions as early as next week.
• Despite the slight dip in safe-haven demand following the US-UK trade deal, the practice of buying gold on dips continues, helping to limit downside movements, according to KCM Trade Chief Market Analyst Tim Waterer, as reported by Reuters.

Gold Price Technical Analysis: Bullish Bias Remains

The stakes are rising ahead of the weekend, especially after President Trump encouraged people to buy stocks, hinting that the US-UK trade deal is the first of many. While it is unclear whether this statement is linked to the upcoming US-China negotiations, the increased uncertainty should support safe-haven demand for gold.

Immediate resistance at the daily Pivot Point of $3,336.Further resistance at the intraday R1 level of $3,384. If bullish momentum continues, the R2 resistance at $3,462 could be a potential target, though it may be out of reach in the short term.

The first support level is at S1, around $3,258.A stronger technical support lies at $3,245, which could act as a key floor.If bearish pressure intensifies, the S2 support at $3,210 may come into play.

As traders brace for the US-China talks, the combination of trade uncertainty and Trump’s unpredictable stance on tariffs could keep gold prices buoyant. Safe-haven buying is expected to persist, especially if sentiment around the talks turns more cautious.