Saad Ullah
Gold (XAU/USD) is taking a hit from a stronger dollar but isn't giving up easily around the $3,300 level, as Trump's decision to push back EU tariffs creates mixed feelings in the market.
Gold (XAU/USD) has been having a rough couple of days, but here's the thing – it's not rolling over completely. The precious metal is holding its ground above that crucial $3,300 mark, even as the dollar flexes its muscles. It's one of those situations where you can see the tug-of-war between different market forces playing out in real time.
Gold (XAU) Gets Hit by Trump's Tariff News, But There's More to the Story
So here's what's happening with gold (XAU/USD) right now. It's been sliding during Tuesday's European session, but every time it looks like it might break down, it finds some buyers stepping in around $3,300. That's actually pretty impressive when you consider the headwinds it's facing.
The big news everyone's talking about is Trump's decision to hold off on those massive EU tariffs. He was planning to slap a 50% tariff on European goods starting June 1st, but now he's pushing that back to July 9th. This came after he had a chat with EU President Ursula von der Leyen, who basically said "hey, we want to make a deal, but we need more time."
Now, you might think this is bad news for gold since it reduces some of that trade war tension, and you'd be partly right. The dollar has been getting stronger on this news, which naturally puts pressure on gold. But here's where it gets interesting – the market isn't exactly celebrating like crazy, because everyone knows Trump's trade policies are still a big question mark.
Why XAU Bulls Aren't Throwing in the Towel Just Yet
Even though gold (XAU) is under pressure, there are some pretty solid reasons why it's not collapsing. First off, nobody really knows what Trump's going to do next with trade. One day he's delaying tariffs, the next day he might be ramping them up. That kind of uncertainty? Gold loves it.
Then there's the whole Federal Reserve situation. The market is basically betting that the Fed is going to cut rates at least twice this year – we're talking about two quarter-point cuts that could happen before December. When rates go down, the dollar typically gets weaker, and that's music to gold's ears.
Plus, let's be honest about America's money situation. Trump's got this massive spending bill – he calls it his "Big, Beautiful Bill" – that could add about $4 trillion to the deficit over the next ten years. The House already passed it, and now it's the Senate's turn. When governments start throwing around numbers like that, smart money tends to flow into gold.
The Dollar's Having Its Moment, But Gold (XAU) Isn't Backing Down
Here's what's really interesting about the current setup. The dollar has been beaten up pretty badly recently, hitting monthly lows, so this bounce back was kind of expected. But gold isn't just rolling over and playing dead. It's showing some real backbone around that $3,300 level.
The tariff delay news gave markets a bit of relief – nobody wants a full-blown trade war. But investors aren't exactly popping champagne bottles either. The tensions between the US and China are still there, simmering in the background. And when you've got the world's two biggest economies still not playing nice, that's the kind of environment where gold typically does well.
What's also supporting gold is the growing concern about US finances. This isn't just about one bill – it's about a pattern of spending that's making people nervous about the long-term health of the dollar. And when people start questioning the dollar's strength over time, guess where they put their money?
Technical Picture Shows Gold (XAU) at a Crossroads
From a chart perspective, gold (XAU) is sitting at a pretty interesting spot right now. It's hanging around this upward trend line that's been supporting it, but it's also flirting with some key levels that could determine where it goes next.
If gold breaks below $3,300 and takes out that 100-period moving average on the 4-hour chart, things could get ugly fast. That's the kind of technical breakdown that could trigger more selling and push prices lower. But here's the flip side – if it can hold these levels and start moving higher, there's some decent resistance up around $3,325-3,326 that it'll need to clear first.
The bulls would really like to see gold reclaim that $3,400 level. If that happens, then we're talking about a potential run toward $3,430, and if the momentum really gets going, maybe even a test of those all-time highs around $3,500 that we saw back in April.
This Week's Economic Data Could Shake Things Up for XAU
The market's got some big events coming up that could really move the needle for gold (XAU). Today we're getting Durable Goods Orders and Consumer Confidence numbers, which should give us a better read on how the US economy is doing.
But the real action might come Wednesday when the Fed releases those FOMC minutes. Everyone's going to be parsing through those looking for clues about future rate cuts. If the Fed sounds more dovish than expected, that could be rocket fuel for gold. If they sound more cautious, well, that might give the dollar another boost.
Thursday and Friday are also loaded with important data. We've got the preliminary GDP numbers for Q1, followed by the PCE inflation data – that's the Fed's favorite way to measure price pressures. These releases have the potential to create some serious volatility in the XAU/USD pair, which means traders better be ready for some wild moves.
The bottom line is this: gold's facing some near-term pressure from dollar strength and the tariff delay news, but the fundamental picture still looks pretty supportive. Between Fed rate cut expectations, fiscal concerns, and ongoing geopolitical tensions, there are plenty of reasons why gold could bounce back stronger. For now, that $3,300 level is the line in the sand – hold it, and the bulls stay in the game. Break it, and things could get interesting in a hurry.
Saad Ullah
