Gold prices (XAU/USD) are pulling back slightly after reaching a monthly high of $3,392 during early Tuesday Asian trading. However, the yellow metal remains supported by heightened geopolitical tensions and persistent concerns over U.S.-China trade relations. Market attention is now shifting to the U.S. Job Openings and Labor Turnover Survey (JOLTS) data due later today.
Trade and Geopolitical Risks Continue to Support Gold
Despite the modest retracement, gold is expected to maintain its bullish momentum amid growing fears surrounding trade policy instability and global tensions. The recent announcement by U.S. President Donald Trump to double import tariffs on steel and aluminum to 50% has intensified concerns over the economic outlook and U.S. trade policy. These developments have weighed on the U.S. dollar, further bolstering gold’s safe-haven appeal.
Adding to the pressure, President Trump accused China of backtracking on commitments to roll back tariffs and withholding critical supply chain materials. The Trump administration is reportedly working toward a final trade deal deadline set for Wednesday, according to a Reuters report published Monday.
Although the U.S. dollar is staging a modest recovery in early Tuesday trading—likely due to short-covering ahead of key employment data—gold remains well-positioned to benefit from broader risk aversion.
Stronger-than-expected U.S. labor data could bolster the dollar and reinforce expectations of a cautious policy stance from the Federal Reserve, potentially capping further gains in gold prices.
Technical Outlook: Gold Remains Bullish Despite Consolidation
From a technical standpoint, gold remains in a strong uptrend. After holding support at the 21-day Simple Moving Average (SMA), the metal broke above a descending trendline resistance near $3,346, closing Monday at $3,382.
Currently, gold is encountering resistance at $3,377, which corresponds to the 23.6% Fibonacci retracement level of the April rally. A decisive move above this zone—and a confirmed breakout above $3,400—could open the path to a retest of the May high at $3,439 and ultimately the record high near $3,500.
The 14-day Relative Strength Index (RSI) remains above the midline, signaling a continued bullish bias despite a slight pullback.
On the downside, a break below the former trendline resistance, now turned support at $3,341, could prompt a deeper correction. Further support lies at the $3,300 level, marked by the confluence of the 21-day SMA and the 38.2% Fibonacci retracement. A more extended decline could target the 50-day SMA and 50% Fibo level near $3,232.
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