Gold Price Climbs as Dollar Weakens and Trade War Concerns Return

Gold price remains on a steady upward trajectory this week, supported by a weaker U.S. dollar, renewed trade tensions, and increased safe-haven demand. The precious metal is set to close the week with gains above 1.5%, trading at $3,333, up 0.26% as of Friday. Market liquidity has been thin due to the U.S. Independence Day holiday, but escalating geopolitical and economic risks have helped sustain bullish sentiment.

President Donald Trump’s confirmation of potential tariffs ranging from 10% to 70%—set to take effect on August 1—has heightened market uncertainty. According to Treasury Secretary Scott Bessent, nearly 100 countries could be affected by reciprocal tariffs, although he hinted at incoming trade deals ahead of the July 9 deadline. These developments have pushed investors toward gold as a reliable hedge.

Economic Signals and Fed Policy Outlook

The current economic data offers a mixed picture, influencing the gold price. While June’s Nonfarm Payrolls rose to 147,000—above expectations—most of the growth came from government hiring, and private-sector job creation reached an eight-month low. This has fueled concerns over a potential slowdown in the business sector.

Initial jobless claims also dropped to 233,000, reflecting a resilient labor market. Despite this, the Federal Reserve appears in no rush to adjust interest rates. Fed Chair Jerome Powell’s cautious stance suggests the central bank may wait to assess the long-term inflationary impact of trade policies. Investors will closely monitor next week’s FOMC minutes and upcoming speeches from Fed officials for further clues.

Meanwhile, elevated Treasury yields continue to cap the gold price rally. The 10-year yield ended at 4.338%, and real yields also inched higher, limiting gains for non-yielding assets like gold.

Technical Outlook: Key Levels to Watch

From a technical standpoint, the gold price is trading sideways around the $3,350 zone. While momentum remains intact, the market has yet to break above the June 16 high of $3,452. A clear move above $3,400 and $3,452 would confirm bullish continuation, potentially targeting the record high of $3,500.

However, if gold dips below $3,300, it could test the June 30 low of $3,246. A further drop may expose the next major support near $3,120. Despite the current consolidation, the Relative Strength Index (RSI) suggests stability, signaling that a breakout may still be in play.

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