Image Source: Pixabay
 

Gold (XAUUSD) prices are rising despite a strong U.S. Dollar as markets react to President Trump’s aggressive new tariffs. Investors are rushing to safe-haven assets, driven by fears of a global trade war. The Federal Reserve remains cautious, with mixed signals on future rate cuts. At the same time, technical patterns show bullish momentum in gold. With uncertainty mounting, gold continues to attract demand as a hedge against rising geopolitical and economic risks.
 

Gold Price Climbs despite Strong Dollar as Markets React to Tariff Shock

President Trump’s latest trade actions have shaken global markets. On Thursday, he announced a steep 35% tariff on Canadian imports, effective August 1. This follows a 50% tariff on US copper imports earlier in the week. In total, more than 20 tariff announcements have been issued, fueling fears of a global trade war and pushing investors toward safe-haven assets like gold.

The gold rush is no surprise, as the metal has historically performed well during periods of geopolitical and economic uncertainty. The recent surge in gold prices reflects investor anxiety over escalating trade tensions. At the same time, the Federal Reserve’s June meeting minutes revealed growing concern among policymakers about inflation risks linked to tariffs. However, with a strong labour market as evident in jobless claims falling to 227K, there appears to be no immediate urgency to cut interest rates.

This blend of rising trade risks and a cautious Fed has kept the US Dollar near a two-week high. Still, gold remains resilient, trading higher despite the stronger Dollar. Mixed signals from Fed officials further complicate the outlook—Mary Daly hinted at rate cuts soon, while Christopher Waller advocated for action in July. In contrast, Alberto Musalem emphasised the importance of maintaining stable long-term inflation expectations. With little major data expected on Friday, markets will remain focused on trade news and Fed commentary, both of which continue to support gold’s bullish trend.
 

Broadening Wedge Confirms Gold’s Bullish Trend as $3,600 Target Emerges

The gold chart below shows a well-defined Symmetrical Broadening Wedge pattern, a formation that typically indicates rising volatility and potential breakout scenarios. This pattern started forming after a sharp rally in early 2025, with the price creating a series of higher highs and lower lows within the wedge structure.

(Click on image to enlarge)

In mid-June, gold broke out above the upper trendline of the wedge, confirming a bullish breakout. The price surged toward the $3,450–$3,500 resistance zone but failed to sustain above it, as marked by two orange circles on the chart. Despite these failed attempts, gold has consistently held above the previous breakout levels, and every dip is being bought, which reflects strong underlying momentum.

Currently, gold trades near $3,336, comfortably above the $3,244 weekly low and the lower wedge boundary. As long as the price stays above the upper wedge line, the bullish structure remains intact. This type of consolidation near the highs often serves as a base for the next upward move. If gold closes above $3,450 again, the next target will likely be around $3,600. On the downside, $3,244 and the lower wedge line serve as important support levels. Momentum remains strong, and the broadening wedge suggests increased volatility ahead, most likely in favour of the bulls.
 

Conclusion

Gold price remains firm above $3,340, supported by safe-haven demand amid escalating trade tensions and tariff risks. Despite a strong US Dollar and uncertainty over Fed rate cuts, bullish technical patterns and strong fundamentals support further upside. As long as geopolitical risks persist, gold is likely to remain a favoured asset among investors seeking stability. 

More By This Author:

Gold’s Bullish Trend Strengthened By Geopolitical Risks And Fed Rate Cut Expectations
Gold Price Struggles Near Key Support As Trade Tensions And Fed Uncertainty Loom
Gold Prices Rise Amid Strong Jobs Data, U.S. Debt Surge, And Trade War Fears