The gold price saw an upward thrust on Friday when markets reacted against President Donald J. Trump over his sweeping trade melees. Coming in the wake of global tensions being resurrected by Trump’s announcement of a 35% tariff on Canadian imports, the demand for gold rose cataclysmically as investors clutched to established stores of value.
The spot price for gold was up by 0.3% to a level of US$3332.73, while the gold future lay around US$3343.70, according to various market sources.
Gold eyes $3,392 after Trump’s 35% Canada tariff
What triggered gold’s latest rally?
Gold prices were set on a surge following the surprise trade salvo fired by President Trump. Speaking in Ohio, Trump called for a 35% tariff on all goods from Canada, with effect from 1st August 2025. He further hinted at imposing additional tariffs of 15 to 20% for other countries should they fail to work out new trade accords.
The protectionist measures have, however, stirred fears of another trade war, with all parties disrupted on supply chains and retaliatory gestures. As uncertainty grips the financial markets, gold has had a swift rally as the usual hedge against geopolitical shocks.
Market analysts say that this could become a turning point for global trade policy. Because of the ripple effects,” they say, “we will see pressure placed on global economic growth and cross-border trade for energy, commodities, and consumer goods.”
Is the U.S. dollar’s strength capping gold’s momentum?
Indeed, the dollar helped restrict gold’s rally. The dollar index witnessed its strongest weekly performance since February 2025, thus creating greater expense for dollar-denominated assets such as gold from the foreign investors’ perspective.
A strong U.S. dollar has been driving gold prices downward despite bullish fundamentals. Their inverse relationship remains a significant factor preventing gold from reaching its full upside potential.
There is a divergence in meanings in the market. While fears of trade push gold upward, the dollar, supported by a strong U.S. economy, peeks in to check the gains.
Stronger dollar curbs gold’s rally, marking the best weekly gain since February 2025.
How do jobless claims and Fed expectations impact gold?
Meanwhile, new U.S. economic data brought yet another level of complexity to the gold market. Weekly jobless claims fell to their lowest in seven weeks, indicating the sustained strength of the labour market.
This drop caught the market unawares in terms of expectations for an imminent Federal Reserve rate cut. A resilient job market would mean that the Fed may want to keep its foot on the brake in terms of rate cuts.
Rate cuts delayed in view of this usually make assets-which do not pay interest-like gold less attractive, though safe-haven demand currently occupies the dominant position.
The Fed rate outlook is now closely tied to upcoming inflation data, employment reports, and global macroeconomic events, including Trump’s trade policies.
Is gold ready to breach key technical resistance?
Technically, gold remains in a bullish zone. The XAU/USD pair is testing immediate resistance at $3,340. A breakout could see prices heading towards $3,366 and then the highly watched $3,392 level.
According to analysts, $3,392 is a key threshold. A clear move above that could trigger an aggressive upward trend, possibly extending towards the $3,400–$3,420 zone.
Failure to break this resistance may lead to short-term consolidation. However, the broader macro backdrop remains supportive of higher gold prices.
Technical indicators show positive momentum, with the RSI still below overbought levels. Support is holding firm near $3,310, making dips attractive to buyers.
Will gold sustain its momentum amid growing uncertainty?
Technicals show positive momentum with RSI not yet in overbought territory. Support holds near $3,310, and dips have been an attraction to buyers.
That remains the key question. With global businesses entering an uncertain phase, the safe-haven nature of gold is sharpening. Trump’s trade actions could well set in motion protectionist approaches throughout other parts.
Aside from the lift in demand due to inflation data from the U.S. and around the world, central bank decisions and geopolitical tensions continue to chart the path for this precious metal.
Market sentiment continues to be cautiously bullish, as gold would register more gains in the event of escalating trade tensions or worsening economic indicators.
What lies ahead for gold investors?
Gold’s short-term strength rides largely on the Trump tariff timing and any Canadian retaliation.
- Should XAU/USD stab through $3,392, the investor community could very well try $3,420–$3,440.
- Failure to hold above $3,340 might consolidate price between $3,310–$3,295.
- Keeping in mind that the dollar strength may continue to remain paramount, especially if jobs and inflation numbers continue to remain on the stronger side.
- The Fed relation now looks more neutral than before, thus decreasing the probability of rapid easing in 2025.
Institutional flows into gold-backed ETFs have rekindled, signifying the growing investor appetite for safe-haven exposure. Now under observation for any further developments are the U.S. trade relations, because any fresh bouts of tariff or currency shocks would fly an old rally.
Three Questions Investors Must Ask
- Will tariffs, Trump-style, be put in place in countries other than Canada over the next few weeks?
- Will the strength of the U.S. dollar continue apart from denting the rally of gold?
- Will the stronger economic data change the rate outlook of the Fed?
Three Market Facts on the Table
- Trump established a 35% customs tariff on all imports from Canada, effective August
- Gold ascended to $3,332.73, testing the resistance at $3,340, and is eyeing $3,392.
- U.S. jobless claims hitting a seven-week low helped strengthen the dollar index.
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Conclusion
Gold remains at the centre of the global economic tug-of-war: on one side, investors are scared by the spectres of Trump tariffs, trade wars, and increased global risks; on the other, they fear the strong U.S. dollar and delayed Fed cuts.
Yet up towards $3,392, gold represents strong underlying demand; if global tensions deepen, overseas, even more so would be the investor interest in gold.
While there is uncertainty, awaiting clearer direction from the Fed and frontlines of geopolitics, gold remains steadfast as the asset to own.
