Market sentiment has turned increasingly cautious following U.S. President Donald Trump’s announcement of plans to double tariffs on steel and aluminum imports—from 25% to 50%. The aggressive move has reignited trade tensions and increased pressure on risk assets, while a weakening U.S. dollar has further supported gold prices.
The standoff between Washington and Beijing intensified over the weekend. President Trump accused China of breaching a trade agreement reached earlier this year in Geneva. “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!” Trump wrote on his Truth Social platform Friday.
The Geneva accord had established a 90-day freeze on new tariffs, with the U.S. agreeing to cut duties on Chinese goods from 145% to 30%, while China reduced its tariffs from 125% to 10%. The agreement also included provisions for China to lift export restrictions on critical minerals vital to U.S. manufacturing.
In response, China’s Ministry of Commerce dismissed Trump’s accusations as “groundless,” asserting that the U.S. had implemented several discriminatory policies—including export controls on AI chips, a ban on chip design software, and the revocation of Chinese student visas. The ministry reaffirmed China’s commitment to defending its rights and warned of “resolute and forceful measures” should the U.S. continue its current course.
With the U.S. dollar coming under renewed pressure, gold has continued to benefit from increased safe-haven demand as market participants turn risk-averse.
Technical Analysis: Gold Tests Key Resistance as Bullish Signals Strengthen
Gold (XAU/USD) is currently challenging the upper boundary of a symmetrical triangle pattern, with resistance forming around the psychologically important $3,350 level.
The 20-day Simple Moving Average (SMA) is positioned near $3,295, slightly below the $3,300 threshold. A 2% price rise in Monday’s session has pushed gold into bullish territory, with the Relative Strength Index (RSI) climbing to 57—indicating growing buying momentum.
A confirmed breakout above the current trendline resistance could pave the way for a retest of May’s high near $3,431. Should bullish momentum persist, gold could aim for the all-time high of $3,500 reached on April 22.
Conversely, failure to maintain momentum could see prices retreat below $3,300. A decline toward the 23.6% Fibonacci retracement level from the January-April rally, near $3,291, is possible, with further downside risk extending to the 38.6% retracement level at $3,161.
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