Gold Holds Above $3,330 as Inflation and Tariff Shock Raise Breakout Stakes

Gold (XAU/USD) Firms as Traders Digest CPI Spike, Trump Tariff Threats, and Fed Signals

Gold (XAU/USD) rebounded from a two-day slide as traders responded to escalating policy risk and inflation data that shook confidence in a near-term Fed rate cut. After briefly dropping to a multi-day low on Tuesday, spot gold clawed its way back above $3,328, with U.S. futures hovering around $3,336.70. The broader macro backdrop continues to drive demand for the metal, though technical resistance looms ahead of $3,370.

The latest U.S. CPI print revealed a 0.3% MoM rise for June, pushing annual inflation to 2.7%, up from 2.4% in May. Core inflation also ticked up to 2.9% YoY, reinforcing fears that pricing pressures are not easing quickly enough to justify rate cuts. These figures pushed the U.S. dollar to its highest level since June 23, making gold more expensive for foreign buyers and capping upside in the short term.

Policy Hawkishness and Inflation Risks Cap Bullish Momentum in XAU/USD

Federal Reserve rhetoric added to gold’s volatility. Boston Fed President Susan Collins noted that the economy's resilience allows the Fed time to assess policy moves, while inflation risks remain elevated. She projected inflation could rise toward 3% in the second half of 2025, due in part to tariff spillovers. Separately, Dallas Fed’s Lorie Logan emphasized a need for tight policy “for a while longer,” warning that early rate cuts might worsen inflation persistence. That stance pushed Treasury yields higher and kept risk appetite contained, reinforcing the bid in gold as a hedge—but also supporting the dollar and limiting aggressive upside in the non-yielding asset.

Trump Tariffs Reignite Risk Hedging, Offer Soft Floor for Gold Bulls

Former President Donald Trump’s tariff barrage continues to roil markets. A proposed 200% levy on pharmaceutical imports by month’s end followed a 50% copper import tariff, with further moves aimed at over 20 countries. His threats of a 30% tax on EU and Mexican goods raised alarms about broader trade tensions. While equity markets remain cautious, gold appears to be drawing soft-haven flows amid tariff-driven inflation fears. These developments may bolster XAU/USD’s appeal, particularly if Trump’s proposals spark retaliatory actions.

Technical Analysis: Gold Caught in Consolidation, Eyes $3,370 Trigger

From a technical standpoint, gold is attempting to hold above $3,330, where the 50-period SMA intersects with a longer-term triangle consolidation. Bulls are watching for a decisive move through $3,342–$3,343, which could open the door for a retest of the $3,365–$3,366 resistance band. A clean breakout would place focus on $3,370, the symmetrical triangle apex and a potential ignition point for renewed upside toward $3,396 and $3,422.

Below current levels, initial support stands near $3,320, followed by $3,300 and the deeper $3,283–$3,282 region. A breakdown below $3,248–$3,247 would undermine the bullish recovery narrative and risk accelerating a broader pullback.

Oscillators remain neutral, with the RSI hovering just under 50. Traders are looking for clearer candlestick confirmation, with bullish engulfing or spinning top signals near support zones potentially triggering follow-through buying. Conversely, a bearish rejection candle at $3,370 would reassert resistance and trap longs.

What Comes Next: Fed Watch, PPI Print, and Headlines on Tariffs

The next catalyst lies in the U.S. PPI data due Wednesday, which could reinforce the CPI shock or offer some moderation. Market pricing for a September rate cut has faded from near 70% to under 50% post-CPI, which reshapes the short-term trajectory for gold. Meanwhile, further commentary from FOMC members and updates on the evolving Trump tariff agenda will likely drive directional sentiment.

Rate cut speculation, yield curve steepening, and macro hedge positioning will remain dominant themes into the end of the week. If inflation surprises continue and Trump’s tariff threats escalate, gold could re-enter breakout mode.

Verdict: Gold (XAU/USD) Cautiously Bullish with Resistance in Sight

XAU/USD remains constructive as long as it holds above $3,300. A decisive move through $3,370 would validate bullish momentum and target the $3,396–$3,422 band. While policy headwinds temper full-throttle buying, tariff risk and macro anxiety continue to offer a solid fundamental floor. As of now, Gold (XAU/USD) is rated BUY with caution, awaiting breakout confirmation above $3,370 amid a tense macro landscape.

That's TradingNEWS