Gold extends gains in bullish channel as Trump tariffs and CPI fears hit markets

Gold surged as President Trump’s new tariff threats rattled global markets and reignited safe-haven demand. Investors rushed to gold after the US announced steep duties on major trading partners, fueling fears of a trade war. The rally gained strength amid geopolitical risks and market uncertainty. Traders now await key data, including the US CPI and China’s GDP, for clues on inflation and interest rates. Gold remains firmly in focus as risk sentiment stays fragile.

Gold surges on Trump tariff shocks as markets brace for inflation and economic data

Gold’s rally was sparked by President Trump’s announcement of new tariffs. These include a 30% duty on imports from the European Union and Mexico, starting August 1. He also imposed a 35% tariff on Canadian imports and proposed a broad 15%-20% rate on other trading partners. Additionally, a steep 50% tariff on copper imports further escalated global trade tensions. These aggressive measures triggered fears of a widespread trade war, pushing investors toward safe-haven assets like gold. As a result, gold prices surged to $3,374 in early trading.

However, the rally was short-lived as European Commission President Ursula von der Leyen announced that the EU would delay retaliatory action until August 1. Her statement signalled a preference for diplomacy over escalation, which calmed markets. The US Dollar briefly rebounded on this news, prompting some profit-taking in gold. Still, the metal held its ground as US Treasury yields paused and overall market sentiment remained risk-averse.

Investors are now turning their focus to Tuesday’s US Consumer Price Index (CPI) report. A higher-than-expected inflation reading could influence the Federal Reserve’s decision on interest rates. Markets are currently pricing in two 25-basis-point cuts by the end of 2025. China’s Q2 GDP data, due before the CPI, could also impact market sentiment. Meanwhile, geopolitical risks remain elevated as the US enters a new corporate earnings season. Trump has also promised further action on Russia after announcing plans to send Patriot missiles to Ukraine.

Gold extends bullish rally after breaking technical resistance in uptrend channel

The gold chart below shows that the price is moving within a well-defined ascending channel. This bullish structure, characterised by higher highs and higher lows, has been in place since early May. Recently, the price rebounded from the lower boundary of the channel near $3,250, forming an inverse head and shoulders pattern, which is a classic signal of bullish reversal.

This reversal pattern led to a breakout above the neckline resistance around $3,335, pushing gold toward the upper half of the channel. The price then encountered resistance near $3,374, an area that aligns with previous highs marked on the chart. This level acted as a short-term barrier, triggering a brief round of profit-taking among traders.

Despite this pullback, gold continues to trade above the neckline and the channel’s median line, indicating the broader uptrend remains intact. As long as the price stays above $3,335, the bullish outlook is likely to persist. A breakout above $3,375 could pave the way for further gains toward the upper boundary of the channel, estimated around $3,450–$3,500. For now, short-term traders may look for consolidation above support to re-enter long positions. A drop below $3,290 would signal potential bearish pressure.

Conclusion

In conclusion, gold remains in a strong bullish trend driven by heightened geopolitical tensions and aggressive US tariff policies. Despite a brief pullback, technical signals support further upside as long as prices hold above key support levels. With primary economic data and geopolitical events ahead, gold is likely to stay in focus as investors seek safety amid rising uncertainty.

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