Gold Eyes $3,392 After Trump’s 35% Tariff on Canada Rattles Markets

Gold prices climbed on Friday as fresh trade tension returned to the spotlight. U.S. President Donald Trump announced a 35% tariff...

Quick overview

  • Gold prices rose on Friday due to renewed trade tensions after President Trump announced significant tariffs on imports.
  • The strong U.S. dollar is limiting gold's gains, making it more expensive for non-dollar buyers.
  • Surprisingly strong U.S. job data is reducing expectations for Federal Reserve interest rate cuts, which typically support gold prices.
  • Technically, gold is poised for a potential breakout above $3,340, with key support levels indicating bullish momentum.

Gold prices climbed on Friday as fresh trade tension returned to the spotlight. U.S. President Donald Trump announced a 35% tariff on imports from Canada and hinted at 15–20% blanket tariffs on other trade partners. This follows a series of sharp levies earlier in the week,including a 50% tariff on U.S. copper imports and duties aimed at Brazil, Japan, and South Korea. All these tariffs are scheduled to take effect on August 1.

Naturally, this stirred safe-haven demand, but the rally in gold has been somewhat muted. Why? The U.S. dollar is flexing muscle again. The Dollar Index (DXY) is on track for its strongest weekly performance since late February, making gold more expensive for non-dollar buyers.

“Even with Trump dialing up tariff pressure, gold hasn’t seen the explosive reaction it used to,” said Tim Waterer, Chief Market Analyst at KCM Trade. “Investors have become desensitized to the tariff drama and Trump’s abrupt policy style.”

So while geopolitical tension tends to support gold, the interplay with a strong greenback is keeping gains in check—for now.

Strong Jobs Data Cools Fed Rate Cut Bets

Gold’s upside was also capped by surprisingly strong U.S. economic data. Weekly jobless claims came in at a seven-week low, signaling resilience in the job market even as other economic indicators show signs of slowing.

That resilience may take the pressure off the Federal Reserve to cut interest rates anytime soon. Since gold doesn’t pay interest, it usually benefits in a low-rate environment. But if the Fed stays on hold, it could limit how far gold can go in the short term.

Still, gold remains a solid hedge in times of political or economic volatility. With U.S. elections around the corner and Trump’s trade policies back on the table, gold may stay in demand—even if the dollar puts a ceiling on immediate gains.

Gold Chart Eyes Breakout Above $3,340

From a technical perspective, gold (XAU/USD) is setting up for a potential breakout. After bouncing from the $3,282 support zone, prices are now hovering near $3,335 and testing a descending trendline that has blocked every rally since late June.

Momentum is building. The RSI just crossed 64, with no bearish divergence in sight. That tells us bulls still have fuel in the tank. The 50-period SMA, now sitting at $3,316, has also flipped into support—another positive sign.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart – Source: Tradingview

Key levels to watch:

  • Resistance: $3,340 (trendline), $3,366, $3,392
  • Support: $3,316 (SMA), $3,309, $3,282

Trade Setup (Breakout Strategy):

  • Entry: Above $3,340 on a strong bullish candle
  • Stop: Below $3,316
  • Targets: $3,366 and $3,392

In my experience, gold often breaks out cleanly when price compresses near a trendline with rising RSI and higher lows. If volume kicks in on the breakout, we could see a fast move toward $3,392.

Let’s see if bulls are ready to run.

ABOUT THE AUTHOR See More
Arslan Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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