• Gold price attracts buyers for the second straight day amid a combination of supporting factors.
• Fed rate cut bets drag the USD to a multi-year low and underpin the non-yielding yellow metal.
• The uncertainty over Trump’s policies offsets the positive risk tone and benefits the XAU/USD pair.

Gold price (XAU/USD) maintains its strong bid tone through the first half of the European session on Tuesday and currently trades around the $3,340 area, up over 1% for the day. The US Dollar (USD) languishes near its lowest level since February 2022 amid the growing acceptance that the Federal Reserve (Fed) would resume its rate-cutting cycle in the near future, which, in turn, is seen benefiting the non-yielding bullion. Apart from this, the heightened uncertainty over US President Donald Trump's tariff policies ahead of the July 9 deadline assists the commodity to build on the previous day's goodish rebound from a one-month low.

Bullish traders, meanwhile, seem rather unaffected by a generally positive tone around the equity markets, which tends to undermine the safe-haven Gold price. This, in turn, suggests that the path of least resistance for the XAU/USD pair remains to the upside and supports prospects for additional gains. Investors, however, might refrain from placing aggressive bets and opt to wait for this week's important US macro releases scheduled at the start of a new month, including the Nonfarm Payrolls (NFP) report on Thursday. In the meantime, Fed Chair Jerome Powell's comments on Tuesday might provide some impetus to the XAU/USD pair.
 

Daily Digest Market Movers: Gold price remains well supported by bearish USD, trade jitters

• US President Donald Trump expressed frustration over stalled US-Japan trade negotiations and also threatened to raise tariffs on certain countries as his July 9 deadline approaches. Adding to this, White House spokesperson Karoline Leavitt said that Trump would meet with his trade team to set tariff rates for countries if they don't come to the table to negotiate in good faith.
• Meanwhile, US Treasury Secretary Scott Bessent warned that countries could be notified that tariff rates are scheduled to rise sharply from a temporary 10% level to rates of 11% to 50% announced on April 2. This, in turn, drives some safe-haven flows during the Asian session on Tuesday and assists the Gold price to build on the overnight goodish recovery move.
• Trump steps up his pressure campaign on Federal Reserve Chair Jerome Powell to lower borrowing costs in a handwritten note on Monday. This comes after the US Personal Consumption Expenditures (PCE) report showed on Friday that consumer spending unexpectedly declined in May and keeps the door open for further monetary policy easing by the central bank.
• The markets are currently pricing in a smaller chance that the next rate reduction by the Fed will come in July and see a roughly 74% probability of a rate cut as soon as September. This, along with concerns about the worsening US fiscal condition, drags the US Dollar to its lowest level since February 2022 on Tuesday and lends additional support to the XAU/USD pair.
• The Senate narrowly approved a procedural vote to open debate on Trump’s comprehensive “One Big Beautiful Bill,” which would add approximately $3.3 trillion to the federal deficit over the next decade. This should keep the USD on the defensive ahead of this week's key US macro releases and support prospects for a further appreciating move for the commodity.
• Traders now look forward to the release of the US ISM Manufacturing PMI and Job Openings and Labor Turnover Survey (JOLTS) for some impetus later during the North American session. The focus, however, will remain glued to the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Thursday.
   

Gold price could accelerate the positive move once the $3,350 immediate hurdle is cleared

(Click on image to enlarge)

From a technical perspective, any subsequent strength beyond the $3,324-3,325 immediate hurdle could attract some sellers near the $3,350 region. This is followed by resistance near the $3,368-3,370 region, above which the Gold price could accelerate the positive move and aim toward reclaiming the $3,400 mark. A sustained strength beyond the latter would shift the near-term bias in favor of the XAU/USD bulls and pave the way for additional gains.

On the flip side, the $3,300 round figure now seems to protect the immediate downside ahead of the $3,277-3,276 horizontal support and the overnight swing low, around the $3,246-3,245 region. Failure to defend the said support levels could make the Gold price vulnerable to accelerate the fall towards testing the $3,210-$3,200 intermediate support before eventually dropping to the $3,175 area amid slightly negative oscillators on the daily chart.

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