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Gold (XAUUSD) prices are gaining momentum as geopolitical and monetary risks intensify. Tensions between the US and EU over trade are driving safe-haven demand. At the same time, uncertainty around the Federal Reserve's future direction is unsettling markets. Mixed signals on rate cuts and political pressure on the Fed are fueling investor caution. Against this backdrop, gold is nearing a key technical breakout that could trigger a fresh rally.

Gold Rises on US-EU Trade War Fears and Fed Uncertainty

The global market is increasingly nervous as tensions rise between the US and the European Union. Investors are closely watching the outcome of ongoing trade negotiations. The US has threatened to impose a 30% tariff on European exports if no agreement is reached by August 1. In response, EU diplomats are preparing potential countermeasures. This escalating trade conflict is driving up demand for gold as a haven.

Simultaneously, political developments surrounding the US Federal Reserve are adding to the market's uncertainty. A White House official recently claimed that President Trump may fire Fed Chair Jerome Powell—a claim that Trump later denied. Still, the speculation has already impacted market sentiment. In addition, Republican Congresswoman Anna Paulina Luna has accused Powell of perjury, which has further shaken confidence in the central bank's credibility.

Fed officials have offered mixed signals on future interest rate policy. Governor Adriana Kugler argued that rate cuts are not yet appropriate, citing concerns about inflation linked to Trump's tariffs. In contrast, San Francisco Fed President Mary Daly sees two cuts in 2025 as reasonable. Fed Governor Christopher Waller also supports near-term easing, warning that waiting too long could force harsher action later. The US Dollar Index remains stable near 97.90, but growing caution may shift momentum in favour of gold if fear continues to build.

Gold Forms Symmetrical Triangle Ahead of Potential Breakout

The gold chart below shows a clear symmetrical triangle pattern. Since December 2024, gold prices have climbed more than $800, reflecting strong upward momentum. The chart shows an ascending support line, indicating steady buying interest. Meanwhile, the horizontal resistance line has repeatedly limited upward moves, creating a tightening price range.

As of July 22, 2025, gold is trading at $3,386 per ounce, hovering just below the upper boundary of the triangle. This kind of price behaviour near the apex of a triangle often signals a potential breakout. The ongoing consolidation near resistance suggests a bullish bias, especially as the market awaits a decisive move.

A confirmed breakout above the resistance line could push prices toward the $3,700–$3,800 zone. This aligns with the size of the previous uptrend and the height of the triangle. A daily close above $3,420, accompanied by rising volume, would strengthen the breakout case. If the price fails to break higher, a temporary pullback to $3,300 support is possible. However, given the strong technical setup and supportive fundamentals, the overall outlook remains bullish.

Conclusion

Gold remains in a strong position as it tests a central technical breakout point. Rising geopolitical risks and conflicting signals from the Fed add to gold's appeal. While the US dollar remains firm, uncertainty over policy and trade talks favours safe-haven flows. If gold breaches the triangle resistance, a new bullish wave could unfold rapidly. 

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