Introduction: Gold Prices Set for Weekly Gain Amid Global Tensions Gold prices (XAUUSD) climbed on Friday, positioning for a strong weekly gain, driven by a weakening U.S. dollar and renewed investor interest in safe-haven assets. The market remains on edge ahead of the July 9 tariff deadline, a key date in U.S. President Donald Trump’s aggressive trade policy shift. With macroeconomic and geopolitical risks rising, gold appears to be regaining its luster among global investors.
Dollar Weakness Supports Gold Prices
U.S. Dollar Index Slides for Second Week
The U.S. Dollar Index (DXY) fell by 0.2% on Friday, marking its second consecutive weekly decline, making gold more attractive to non-dollar investors. As gold is priced in dollars, a weaker dollar lowers its cost for foreign buyers, often resulting in a demand uptick.
“The apprehension about the fiscal situation in the U.S. after Trump’s sweeping tax-cut bill passed Congress, alongside the tariff uncertainty, is boosting safe-haven demand,” said Ricardo Evangelista of ActivTrades.
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Rising Tariff Tensions Boost Safe-Haven Demand
Trump’s Tariff Policy Triggers Market Uncertainty
Markets turned cautious after the Trump administration shifted from negotiating individual trade deals to pursuing a broader tariff strategy, issuing letters to multiple countries outlining reciprocal tariffs ranging from 10% to 50%. Most tariffs have been reduced to 10% temporarily, but the market is bracing for escalations post-July 9.
- Traders fear this move could ignite a global trade war, fueling demand for safe assets like gold.
- July 9 marks the deadline for countries to reach agreements before harsher tariffs take effect.
- Gold historically benefits during periods of geopolitical uncertainty and economic volatility.
Trump Tax Cuts Add Fiscal Pressure
Sweeping Legislation Creates Budget Concerns
President Trump’s latest tax-cut legislation, which cleared Congress this week, makes the 2017 tax cuts permanent while also funding immigration enforcement. However, it adds new tax breaks promised during his campaign, potentially deepening the U.S. budget deficit.
Economists warn that the combination of reduced revenues and increased spending could worsen America’s fiscal outlook, a key factor encouraging investors to diversify into tangible assets like gold.
Gold Price Forecast: Analysts Eye Breakout Potential
Key Resistance and Support Levels to Watch
With gold regaining momentum, analysts are eyeing critical levels in the XAUUSD technical chart:
- Immediate resistance: $2,380 per ounce
- Key support zone: $2,320–$2,300 range
- Breakout target: $2,450 if safe-haven flows continue
Technical analysts suggest that a close above $2,380 could pave the way for a bullish breakout, especially if macro headwinds persist.
U.S. Jobs Data Complicates Federal Reserve Outlook
Mixed Signals from June Payroll Report
The U.S. nonfarm payrolls report for June showed stronger-than-expected headline job growth. However, a closer look reveals:
- Private sector job creation was the slowest in eight months.
- Government hiring accounted for nearly half the total job gains.
- Wage growth remained moderate, signaling labor market cooling.
“The latest payrolls support a slowing economy without stalling, reducing the immediate pressure on the Fed to cut rates,” said Giovanni Staunovo at UBS.
Implication for Gold Prices
A slowing but resilient U.S. economy creates a mixed outlook for interest rates. Lower or stable rates generally support gold prices by reducing the opportunity cost of holding non-yielding assets.
Why Gold Is Attracting Investors Now
Top Factors Driving Gold Demand in 2025
- Dollar Weakness – A falling dollar increases global demand for gold.
- Trade War Fears – Rising tariff tensions prompt safe-haven buying.
- Fiscal Uncertainty – U.S. budget deficit and tax cuts raise economic risk.
- Central Bank Uncertainty – Mixed economic data clouds Fed policy.
- Technical Support – Strong support zones and potential for breakout.
Market Outlook: What’s Next for Gold Prices?
With key geopolitical and economic catalysts approaching—especially the July 9 tariff deadline—gold markets may continue to experience high volatility. Traders will watch the Federal Reserve’s next moves closely, especially in light of softer private job growth and growing fiscal concerns.
Short-Term Forecast
- Bullish Bias: If tariffs are imposed or dollar weakens further.
- Range-Bound: If markets see progress in trade talks and economic stability.
- Downside Risk: If U.S. economic data strengthens, prompting Fed rate hikes.
Conclusion: Gold Set to Shine Amid Global Uncertainty
The combination of tariff tensions, Trump’s tax cuts, mixed job data, and a weaker dollar is creating fertile ground for gold to potentially break higher in the coming weeks. Investors looking to hedge against volatility and geopolitical risk are increasingly turning to the yellow metal.
As the XAUUSD price forecast remains positive in the short term, all eyes now turn to the July 9 deadline, which could determine the next big move in the gold market.
