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Gold (XAUUSD) is holding steady as markets react to new trade developments and rising policy uncertainty. A new US-Japan trade deal has alleviated some immediate concerns, but tensions between the US and the EU remain unresolved. At the same time, criticism of the Federal Reserve is shaking investor confidence. Weak housing data and falling yields are adding to the cautious mood. Despite these mixed signals, gold continues to find strong support from both global risks and bullish technical patterns.
 

Gold Holds Firm as US-Japan Deal Calms Markets, but EU Tariff Risks and Fed Concerns Persist

The recent US-Japan trade deal marks a temporary easing of global trade concerns. The agreement lowers tariffs from a proposed 25% to 15% and paves the way for $550 billion in Japanese investment. It also grants the US better access to Japan's auto and agricultural markets. While this has helped reduce short-term panic buying, the broader geopolitical environment remains volatile.

The EU and US are still at odds, with less than two weeks left before the August 1 tariff deadline. The threat of 30% US tariffs on EU goods, along with the expected retaliation from the EU, has kept markets on edge. These unresolved tensions continue to fuel demand for safe-haven assets, such as gold. Meanwhile, ongoing doubts about the Federal Reserve's independence have added to investor anxiety. President Trump's public criticism of Fed Chair Jerome Powell and calls for reform have unsettled the market. Treasury Secretary Scott Bessent's remarks about the Fed's "mission creep" and structural issues have only deepened concerns.

On the macroeconomic front, recent data has further clouded the outlook. US existing home sales fell by 2.7% in June, missing expectations and reflecting weakness in the housing market. High mortgage rates and affordability issues appear to be taking a toll on the market. These signals of broader economic stress, combined with uncertainty over the Fed's direction, have pressured yields and limited the US Dollar's strength. As a result, gold remains supported by both fundamental and technical factors.
 

Gold Surges Past Key Resistance, Bull Market Targeting $4000

The gold chart below shows a compelling technical setup in its long-term trajectory. From 2020 to late 2022, gold consolidated within a descending wedge pattern, marked by repeated support tests and firm horizontal resistance near the $2,075 level. This extended consolidation phase built a strong base for the next leg up in prices.
 

(Click on image to enlarge)

In early 2023, gold broke out of the wedge, triggering strong upward momentum. This move formed an ascending broadening wedge, bounded by two diverging trend lines. The expanding structure signals rising volatility and suggests the potential for sharp price swings. Key support levels are marked around $2,790 and $3,000, while resistance first appeared near $3,500. A sustained move above this level could push prices toward the $3,800–$4,000 range.

Currently, gold is consolidating near $3,380, staying well above critical support zones. The trend remains bullish, and the successful breakout above the $2,075 resistance adds to the positive outlook. As long as gold maintains levels above $3,000, the path of least resistance remains upward. With higher highs and higher lows intact, the metal appears well-positioned to retest the upper boundary of the wedge and potentially extend beyond $3,800.
 

Conclusion

Gold continues to trade with a firm tone despite a modest pullback, as investors weigh easing trade tensions against persistent policy uncertainty. The US-Japan deal has reduced immediate risk, but unresolved EU-US negotiations and growing concerns over Fed independence keep markets cautious. Technical indicators support a bullish outlook, with gold holding key levels and signalling further upside. As long as global risks and economic weakness persist, gold is likely to remain in demand. 

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