The gold price forecast turned bullish on Monday as geopolitical tensions between the US and China pushed investors toward safe-haven assets. Gold rose over 2.5%, climbing above $3,350 amid growing uncertainty and a weakening US Dollar.
Tariff War Escalates
Market anxiety intensified after US President Donald Trump announced plans to double tariffs on Chinese steel and aluminium from 25% to 50%. The move comes just weeks after a Geneva trade agreement had paused tariff hikes. That deal had reduced US tariffs on Chinese goods to 30% and China’s duties to 10%, also including agreements on critical mineral exports. However, Trump accused China of breaching the deal, saying it had “totally violated” the terms.
China Pushes Back
In response, China’s Ministry of Commerce rejected Trump’s accusations. It called them “groundless” and highlighted US policies that restrict Chinese access to AI chip technology and academic visas. China warned it would take “resolute and forceful measures” if the US escalates its actions.
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Weaker Dollar Supports Gold
The renewed trade friction has weighed on the US Dollar, adding strength to Gold. As the greenback loses value, Gold becomes more attractive to investors. The current climate has shifted risk sentiment, with traders turning away from equities and toward precious metals.
Technical Outlook: Testing Key Levels
Gold prices are testing resistance at the top of a symmetrical triangle near $3,350. The 20-day Simple Moving Average (SMA) sits just below at $3,295. With the Relative Strength Index (RSI) climbing to 57, momentum appears to favor the bulls.
A breakout above $3,350 could lead to a retest of May’s peak near $3,431. If momentum continues, prices could aim for the all-time high of $3,500 recorded on April 22.
On the downside, a drop below $3,300 may lead to a retreat toward the 23.6% Fibonacci retracement at $3,291 or further to the 38.6% level near $3,161.
All Eyes on the Next Move
As global tensions rise, investors closely watch Gold’s price action for signs of a decisive breakout or another reversal.
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