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Gold continues to trade with a strong bullish bias. The price action reflects growing demand for the safe-haven metal. Tensions between the US and China over tariffs are fueling investor fears. These concerns are pushing traders toward assets like gold. At the same time, the weakening US Dollar and expectations of Federal Reserve rate cuts in 2025 are further boosting gold's appeal. While the market sees some optimism from temporary tariff relief, uncertainty remains high. This creates a supportive environment for gold prices.

Tariff Tensions and Fed Expectations Fuel Gold's Strength

Gold continues to rise as investors seek safety amid growing US-China trade tensions. President Trump’s aggressive tariff strategy has triggered economic fears. China responded with steep tariffs of up to 125% on US imports. This tit-for-tat action raised alarm over a possible slowdown in global growth. Investors now prefer gold as a hedge against market instability and economic uncertainty.

The US Dollar is struggling due to rate cut expectations. Market participants believe the Federal Reserve may lower interest rates multiple times in 2025. Fed officials have expressed concern over the impact of high tariffs. They fear the added cost pressures could slow the economy and trigger a recession. As a result, investors are pricing in a more dovish monetary policy. This weakens the Dollar and boosts non-yielding assets like gold.

Although the White House offered temporary tariff exemptions, the relief is limited. Trump’s comments suggest more tariffs are coming, especially on tech and pharmaceutical imports. This ongoing uncertainty keeps investors cautious. Gold, as a traditional haven, remains in demand. The combination of geopolitical risks, weak Dollar outlook, and rate-cut bets continues to support higher gold prices.

Technical Analysis: Gold's Bullish Setup Within Ascending Channel

The gold market is currently moving within a well-defined ascending channel. This pattern has been forming since late 2024 and continues into 2025. The channel shows a steady uptrend with higher highs and higher lows. The lower boundary acts as a key support line, while the upper line serves as resistance.

The recent price action shows gold bouncing from support near $2,960. This bounce occurred after a short-term pullback, which tested the channel's lower boundary. The rebound was strong, leading to a bullish breakout above previous resistance.

Notably, several technical signals support this bullish momentum. Initially, multiple cup-and-handle patterns formed within the channel. These bullish reversal patterns formed during consolidation and triggered fresh upward momentum. Each breakout was followed by a series of green candles, indicating strong buying interest.

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Secondly, the chart highlights a recent buy signal after a sharp pullback. This dip was short-lived and quickly reversed, supported by a clean bounce from the channel's support. The breakout candle that followed was large and strong, closing near the daily high. This shows aggressive buying at lower levels.

The price has now reached near the ascending channel's upper resistance. While this may trigger a pause or consolidation, the trend remains upward. A breakout above the upper boundary could open doors for new all-time highs.

Another important observation is the volume and strength of the bullish candles near significant levels. The last few bullish surges occurred on strong green candles, showing that buyers are in control. The rejection of lower levels and quick recoveries signal strong demand.

Conclusion

Gold prices continue to find strong support amid global uncertainty and expectations of a dovish Fed. The technical chart confirms a bullish trend, supported by an ascending channel and solid breakout patterns. While short-term consolidation is possible near resistance, the overall outlook remains bullish. As long as the US-China trade tensions persist and the Fed leans toward easing, gold will likely remain a favored asset among investors. 

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