Gold (XAU/USD) shows resilience as it rebounds, climbing back after falling to a recent low. This recovery follows a drop in the US Dollar (USD), which lost momentum due to recent legal developments around President Donald Trump’s tariff agenda. The yellow metal finds support from both fundamental and technical angles, indicating a potential continuation of the bullish trend.

Gold Gains as US Dollar Falls After Court Blocks Emergency Tariffs

The US Dollar initially gained on Wednesday as investors priced in Trump’s aggressive tariff stance. But the rally quickly faded after a federal court ruled against the President’s use of emergency powers. The court stated that Trump violated the International Emergency Economic Powers Act (IEEPA) by imposing tariffs under a declared national emergency. This ruling undermines the legal framework backing his import levies on key goods like steel, aluminium, semiconductors, and automobiles.

Market participants decided as a sign of relief. The potential removal of tariffs could ease inflationary concerns and improve the global trade outlook. However, the uncertainty introduced by the White House’s appeal has led to mixed investor sentiment. Companies that had aligned their manufacturing and investment plans around the tariff regime may now delay hiring or capital spending decisions. Analysts warn that this could affect earnings and consumption in the coming months.

Meanwhile, the US Dollar Index (DXY) slips below 100.00, losing earlier gains. This makes gold relatively cheaper and more attractive to investors. Gold tends to perform well in uncertain economic environments, especially when the USD weakens.

Looking ahead, traders remain cautious amid ongoing economic uncertainty. The legal battle over Trump’s trade policies has heightened concerns about the outlook, and this may limit the impact of upcoming economic indicators on market direction.

Technical Analysis: Gold Price Maintains Bullish Trend within Ascending Channel

The gold chart below shows a clear bullish structure within an ascending channel. This channel began forming in late 2024 and continues to guide price action upwards. The chart also highlights multiple triangle formations, which often serve as consolidation zones before price breakouts.

Each triangle pattern in the chart resolved in the direction of the prevailing trend, which was upward. This indicates strong bullish momentum. After each consolidation, the price bounced sharply and resumed its move higher, respecting the boundaries of the ascending channel.

(Click on image to enlarge)

The chart marks three key “Buy” zones, each occurring at the lower boundary of the channel or after a triangle breakout. These zones provided excellent entry points for traders following the trend. Currently, gold appears to be trading near the middle of the channel, just above $3,300. A triangle pattern has formed again, signalling another potential breakout in the near term.

As long as the price remains inside the ascending channel and respects its lower boundary as support, the bullish bias remains intact. A breakout above the triangle's upper boundary could signal the next leg higher, potentially targeting levels near $3,400 or more. Conversely, a break below the channel would invalidate the current structure and suggest a deeper correction.

Conclusion

Gold continues to show strength as both technical patterns and fundamental factors align in its favour. The recent drop in the US Dollar, fueled by legal setbacks to Trump’s tariff policies, has boosted gold’s appeal. At the same time, bullish chart structures support further upside. Traders watch closely as gold forms another triangle within an ascending channel. If the price breaks higher, it could trigger the next rally. Uncertainty around trade policy may keep pressure on the USD, reinforcing gold’s safe-haven role. For now, the trend remains upward, with momentum on gold’s side. 

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