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Gold (XAUUSD) has seen a recent rise, reaffirming its role as a protective asset during times of instability. The rise follows a broad sell-off in the US Dollar and falling short-term Treasury yields. Rising political tensions in the US have shaken investor confidence. Trump's remarks targeting Fed Governor Lisa Cook and his renewed push for tariffs have added to the instability. Markets have responded with increased demand for safe-haven assets, such as gold. Shifting expectations around Fed policy also support the move. Together, these factors have brought gold back into the spotlight.

Gold Strengthens On Fed Easing Signals and U.S. Political Unrest

Gold’s climb toward $3,400 reflects renewed pressure on the US Dollar. Falling short-term Treasury yields have further supported the rally. Political tensions escalated after Trump accused Fed Governor Lisa Cook of making false mortgage claims. The development sparked widespread risk aversion across markets. As a result, investors moved away from USD-based assets and turned to gold and other safe havens.

Markets reacted swiftly, causing the US Dollar to retreat from its recent highs. Expectations for a 25 bps rate cut at the upcoming Fed meeting added further pressure on the US Dollar. Dovish comments from Fed Chair Powell at Jackson Hole strengthened market expectations for rate cuts. This supported positive sentiment toward non-yielding assets such as gold.

Despite recent moves, the market mood remains unstable. Trump’s fresh tariff threats, particularly his call for 200% duties on certain Chinese goods, gave the dollar a temporary lift. The move revived some of its safe-haven appeal. His remarks also raised geopolitical concerns, especially regarding semiconductor and advanced technology exports. Upcoming mid-level US economic data may offer more clarity on the Fed’s policy direction. But for now, political interference and uncertainty around future monetary policy continue to dominate market direction.

Gold Price Compression Builds toward Bullish Breakout

The gold chart below shows a powerful multi-year bullish structure on the monthly timeframe. The metal broke out of a long-standing ascending triangle pattern that developed between 2018 and late 2023. This breakout, confirmed with strong volume and momentum, set the stage for a sustained rally.

(Click on image to enlarge)

Following the breakout, gold surged past the $2,200 zone. It continued climbing and formed multiple consolidation zones along the way. These consolidation zones, marked as “Price Compression” in the chart, highlight brief pauses within the larger uptrend. A major compression zone developed between $2,400 and $2,600. After breaking out of that range, the price surged toward $3,350, where it is currently consolidating again.

The current price compression forms a symmetrical triangle, suggesting an imminent breakout. If gold clears this consolidation range, a push above $3,400 becomes likely. Technical levels suggest further gains could extend to the $3,600–$3,750 zone. The overall structure remains bullish, supported by higher lows and consistent buying volume. Moreover, there is no sign yet of weakness or trend reversal, keeping the bulls firmly in control.

Conclusion

Gold remains well-positioned for further gains. Political tensions and monetary policy uncertainty continue to support safe-haven demand. The technical setup also points to a strong bullish trend. Price action shows steady momentum with no signs of reversal. If current conditions hold, gold may soon break above key resistance and target higher levels. Markets are likely to stay focused on Fed signals and shifting geopolitical developments in the near term. 

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