XAUUSD is moving in an Ascending Triangle pattern, and the market has reached the higher low area of the pattern
Gold hasn’t been performing the way many expected. After a brief attempt to bounce back, the precious metal is once again under pressure. A key reason? The US dollar has been gaining ground for days, reaching its strongest levels in months.
When the dollar strengthens, gold typically takes a hit. Since gold is priced in US dollars, it becomes more expensive for buyers in other currencies. That tends to cool off global demand, and right now, that’s exactly what’s happening. On top of that, the Federal Reserve’s recent comments suggest there won’t be a rate cut anytime soon — another blow for gold investors.
Let’s face it, gold doesn’t earn any interest. When rates stay high, investors often turn to other assets that offer better returns. So while gold is still a safe haven, it’s having a hard time competing in this current environment.
Trade Tensions Offer Some Support, But Not Enough
At the same time, there’s a bit of a tug-of-war going on. On one side, you have the strong dollar and upbeat US economic data pulling gold down. On the other, there are rising trade tensions that are helping gold hold on — at least somewhat.
New Tariffs Spark Worry
President Donald Trump recently signed an executive order that imposes even higher tariffs on major trading partners. These tariffs are aimed at countries with trade imbalances with the US, and some of them could be as high as 41%. That kind of move adds uncertainty to the global economy — and when things get shaky, people often turn to gold for safety.
Still, that hasn’t been enough to spark a major rally. The latest round of trade talks between the US and China ended without any progress. No deal. No clear path forward. And with the current tariff truce set to expire soon, investors are definitely keeping a close eye on what happens next.
The Market Holds Its Breath Ahead of US Jobs Report
While the global trade situation simmers, traders aren’t making any bold moves just yet. One big reason? Everyone is waiting for the next US jobs report.
Known as the Nonfarm Payrolls (NFP), this monthly report shows how many jobs were added to the economy. It’s a big deal because it can influence everything from interest rates to market confidence. July’s numbers are expected to be lower than June’s, and unemployment might tick up slightly. But until the report is released, most traders are playing it safe.
Also coming up is the ISM Manufacturing PMI — another piece of the economic puzzle. It’s not as high-profile as the jobs report, but it still offers insights into how the US economy is holding up.
If both reports show signs of slowing growth, the pressure could mount on the Fed to consider rate cuts later in the year. That would likely give gold some breathing room. But if the reports show strength, gold may struggle even more.
Federal Reserve Keeps the Door Shut on Rate Cuts
The Fed’s message has been loud and clear: they’re not ready to cut rates just yet. Fed Chair Jerome Powell made it clear in his recent comments that the current policy is right where it needs to be.
Even though inflation has crept up a bit, the Fed isn’t panicking. The latest data showed that prices rose, but not by enough to cause serious concern. The core inflation rate (which leaves out food and energy) came in a little above expectations, but it still wasn’t enough to shake the Fed’s confidence.
XAUUSD is moving in a box pattern, and the market has rebounded from the support area of the pattern
What does this mean for gold? Well, without any immediate plans to lower interest rates, the dollar keeps climbing — and gold keeps getting squeezed.
What’s Holding Back a Gold Rally
So, despite all the noise in the global economy, gold just can’t seem to catch a break. It’s not just the Fed’s stance or the strong dollar. Even the recent 3% economic growth in the US is adding to the pressure. Strong growth means less urgency for economic stimulus, and that makes gold a less urgent buy.
Meanwhile, the uncertainty around China and US trade talks is still unresolved. The two sides met again this week, but there’s no sign of progress. And with the clock ticking on the current truce, investors are growing uneasy.
US officials have hinted that any extension to the truce would have to come from President Trump himself. That adds yet another layer of unpredictability to the situation.
Summary: A Market Stuck in the Middle
Right now, the gold market is caught between competing forces. On one side, you’ve got a strong dollar, solid economic growth, and a cautious Federal Reserve — all of which are weighing down on gold prices. On the other side, you’ve got global trade tensions, inflation concerns, and economic uncertainty providing some support.
But nothing is tipping the balance just yet.
Traders are waiting for more clarity — especially from the upcoming jobs report. If the data disappoints, we might see gold finally break higher. But if it comes in strong, gold could face another round of selling.
Until then, the market remains cautious, watching and waiting for the next move.
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