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Gold (XAUUSD) is gaining support from shifting economic signals and rising global tensions. The Federal Reserve's dovish tone has weakened the US Dollar, boosting gold's safe-haven appeal. At the same time, Trump's aggressive trade moves, including the imposition of steep new tariffs, have rattled financial markets. Investors are turning to gold to hedge against inflation and economic uncertainty. However, strong US data is capping gold's immediate upside. This tug-of-war between hopes for a rate cut and financial resilience is keeping gold in a tight range, even as long-term technical signals point to higher levels.
 

Gold Prices Gain as Fed Signals Rate Cuts and Trade Fears Intensify

Gold remains supported by growing expectations that the Federal Reserve may ease interest rates. Fed Governor Christopher Waller signalled that rising economic risks justify rate cuts. He noted weakness in the labour market and emphasised the need for policy easing as early as July. This dovish stance has softened the US Dollar and boosted investor demand for gold as a safe-haven asset.

Uncertainty around US President Donald Trump's aggressive trade policies adds another layer of support. Trump's announcement of a 50% tariff on copper imports and threats of wider tariffs have unsettled global markets. He has warned over 150 countries about new tariff rates that could trigger inflation and harm global growth. Investors are flocking to gold as a shield against the growing threat of a trade-driven economic slowdown.

However, strong US economic data is limiting gold's immediate upside. Retail sales bounced back with a 0.6% gain in June, and jobless claims fell for a fifth straight week. These indicators indicate economic resilience, which may delay the Fed's rate cuts. Fed officials remain cautious, suggesting that policy will stay tight to control inflation. This has created a tug-of-war between gold's safe-haven appeal and the strong fundamentals of the US economy.
 

Gold Breakout above Multi-Decade Resistance Signals New Bull Market

The gold chart below shows a decisive breakout above a multi-decade resistance line. This line, stretching back to the 1980 peak, capped price rallies for over 40 years. The price finally broke above this level near $2,800, confirming a structural change in long-term market dynamics. Previously, another key breakout occurred near $2,200, breaking out of a classic "cup and handle" formation that was visible from 2011 to 2023.
 

(Click on image to enlarge)

This pattern is often a bullish continuation signal, and its completion marks the beginning of a significant trend shift. The breakout above $2,200 led to the rally toward $3,300+, and now the price is testing new highs. The structure suggests gold is entering a new secular bull market. The long-term resistance line, which had held firm for decades, has now become a solid support level. The two breakout points highlighted in orange—$2,200 and $2,800—now serve as key support levels.

The chart also shows how the price respected the long-term resistance for decades, only to pierce it decisively amid today's macroeconomic uncertainty. The persistent climb despite higher US rates and a resilient dollar underscores the strength of this move. Technical traders will watch for sustained closes above $3,300 to confirm continued upside potential.
 

Conclusion

Gold prices remain steady amid mixed economic signals and growing geopolitical risks. While near-term momentum may be muted, the long-term technical picture points to a major bullish breakout. With strong support now established near $2,200 and $2,800, gold appears well-positioned to extend gains once near-term consolidation ends. Traders should watch for macro signals and confirmation of strength above $3,300 before expecting another leg higher.

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