Gold (XAU/USD) Breaks Above $3,373 as Fed Uncertainty and Stock Market Risks Drive Safe-Haven Rush

Gold (XAU/USD) Presses Higher as Trade Uncertainty and Weak Dollar Fuel Breakout Toward $3,400

Dollar Retreat and Fed Ambiguity Keep XAU/USD in Bullish Formation Despite Choppy Action

The price of Gold (XAU/USD) is forcing its way out of a multi-week range, reclaiming the $3,373 level during early Monday trade and entering a bullish breakout structure after breaching the upper boundary of a symmetrical triangle. The dollar's recent weakness, driven by uncertainty surrounding U.S. tariff policy and mixed signals on the Fed's next rate decision, is reinvigorating demand for the yellow metal. The RSI on the daily chart sits just under 70, flashing a near-overbought but bullish configuration. Price is now coiling above the 50-SMA at $3,343, and intraday structure points to a near-term push toward $3,394, followed by $3,411. Should momentum persist, technical targets extend to $3,434 and $3,500, driven by the inverse correlation to the dollar and a surge in safe-haven rotation.

Trump's Tariff Blitz Pushes Global Uncertainty Higher, Fueling Demand for Non-Yielding Assets

With President Trump preparing to implement sweeping tariffs on August 1—including a 15% to 20% levy on the European Union—markets are responding defensively. Equity markets, despite upbeat S&P 500 earnings (83% beat rate), are signaling hesitation, with recent highs fading quickly. The stock market rally appears brittle in light of global trade uncertainty, which is keeping capital flowing toward hard assets like gold. Traders see these measures as inflationary and politically erratic, reinforcing gold's appeal as a geopolitical hedge. The result is clear: institutional investors are seeking insulation from volatility and unanchored monetary direction.

Fed Messaging Split: Waller's Dovishness Counters Powell's Inflation Warning as Rate Cut Odds Oscillate

Fed Governor Christopher Waller's support for a July rate cut, citing limited inflation impact from tariffs, has clashed with Fed Chair Jerome Powell's forecast of higher inflation in coming months. This divergence is unsettling rate expectations, leaving the USD without a clear direction. Market pricing still reflects two 25 bps cuts by year-end, but conviction is thin. With Powell calling inflation transitory yet persistent, gold remains anchored in a speculative but well-supported uptrend. The lack of clarity is removing confidence in Treasuries and driving allocation toward zero-yielding but inflation-resilient assets like gold.

Technical Structure Shifts: Momentum Now Favors Upside as Consolidation Breaks

Gold’s bullish structure has firmed after a multi-session base formation around $3,322–$3,328, with clear rejections of lower supports near $3,283 and $3,247 in prior sessions. Buyers are firmly in control above $3,343, now acting as dynamic support via the 50-period moving average. RSI at 69.45 suggests room for one more thrust higher before temporary exhaustion. MACD and volume momentum are confirming this move as traders eye $3,400 as a round-number magnet. A sustained break above $3,366 opens the door to retest $3,434, then stretch toward the major psychological level of $3,500.

Conversely, should price break back below $3,343, support clusters re-emerge at $3,328 and $3,309, with $3,283 as last-line demand before bearish momentum takes over. The key now is whether volume follows price—if not, bulls risk fading into another consolidation chop.

Monthly High Achieved at $3,379.60 as Long-Term Trend Remains Intact

Monday’s gold futures opened at $3,355.60, up from Friday’s close of $3,353, and rallied to $3,379.60, setting a new monthly high. Over the past week, gold is down 0.3%, but up 0.2% in the past month and an astounding 38.7% year-on-year, having risen from $2,418.80 on July 19, 2024. The consistency of higher lows and resilient rallies into resistance confirm the long-term bullish trend. Technical sentiment remains clearly tilted toward upside extension unless major macro catalysts—such as a surprise Fed hike or full de-escalation in tariffs—materialize quickly.

Central Bank Demand and Global Rotation Add Structural Support to Gold Bid

The strategic underpinning behind gold’s rally is not just technical—it’s institutional. Central banks have been expanding gold reserves aggressively since Q4 2024, with the PBOC, RBI, and Turkey’s CB all net buyers. As sovereigns diversify away from dollar exposure in light of trade weaponization, gold continues to act as a balance sheet stabilizer. Even as real yields fluctuate, the geopolitical hedge properties of XAU/USD are being repriced higher.

XAU/USD Outlook: Path of Least Resistance Is Up. Bullish Momentum Intact

With geopolitical jitters, unresolved Fed positioning, and inflation tailwinds, the broader setup for XAU/USD remains favorable. The breakout through $3,373 signals the start of a potential new impulse wave with measured targets up to $3,500, then $3,700 by year-end if Goldman Sachs' target plays out. Near-term, risk rests with lack of volume follow-through or a sudden hawkish pivot from the Fed. Still, traders are buying dips, and technicals plus macro signals align for further upside.

Verdict: Buy on breakout continuation above $3,366. Target $3,434–$3,500 short term. Risk defined below $3,322. Long-term outlook remains bullish.

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