Gold Price Nears $3,400 as Tariffs, Rate Cut Bets Fuel Safe-Haven Demand
Gold rose on Thursday, touching $3,378 as US tariffs on India sparked safe-haven buying. This followed President Donald Trump...
Quick overview
- Gold prices rose to $3,378 due to safe-haven buying sparked by new US tariffs on Indian goods.
- Analysts suggest that ongoing tariff threats and expectations of a US rate cut are driving gold's appeal as a defensive asset.
- Gold is currently consolidating in a tightening triangle pattern, with a potential breakout above $3,390 signaling further upside.
- Increased global uncertainty and low interest rates create a favorable environment for gold as a safe investment.
Gold rose on Thursday, touching $3,378 as US tariffs on India sparked safe-haven buying. This followed President Donald Trump slapping a 25% duty on some Indian goods after trade talks stalled. The new tariff will take effect 21 days from August 7 and could raise tariffs on some Indian exports to 50% – the highest on any US trade partner.
India is buying Russian oil, the White House said, so this is a geopolitical move. Markets saw it as another source of global trade friction and gold is front and center for risk averse investors.
Analysts were quick to comment. “Trump is dishing out fresh tariff threats and that’s keeping gold in the frame as a defensive play,” said Tim Waterer of KCM Trade. “It’s moving towards the doorstep of $3,400.”
If it is true that countries are quietly buying gold at its present phenomenal price, then it seems unlikely that it will become cheaper, rather becoming even more expensive in Dollar value as the value of the Dollar declines with inflation, which tariffs are calculated to cause
— Jim Wray (@JimWray) August 7, 2025
Fed Signals Boost Gold
Beyond geopolitics, expectations of a US rate cut are adding to gold’s upside. The US Dollar Index (DXY) is under pressure, near a one week low after last week’s jobs data was weaker than expected.
CME Group’s FedWatch Tool has 95% probability of a 25bp cut in September. Minneapolis Fed President Neel Kashkari said the Fed “may need to act” if the US economy slows.
Low rates reduce the opportunity cost of holding non-yielding assets like gold so it’s a good time to own them. Soft labor data, a weak dollar and aggressive tariff policies have created a backdrop for more upside in precious metals.
Gold (XAU/USD) Technicals: A Triangle Forms
Gold (XAU/USD) is consolidating in a tightening triangle on the 2 hour chart. After rebounding from $3,304 last week, it’s made a series of higher lows and is now above the 50 period SMA at $3,362.The top is at $3,390 – the 100% Fib of the recent drop and the top of the triangle. Price has been rejected below this level multiple times but buyers are still defending higher ground.
The RSI is 57, building momentum without being overbought. A break above $3,390 would likely trigger a quick move to $3,416 and $3,438 and then $3,461 for the Q3 target.
Candlesticks show indecision but that may be compression before expansion. Traders using TradingView’s path tool have drawn a potential breakout leg that will favor upside acceleration once the trendline breaks.
For short term bulls a clean 2 hour close above $3,390 is a good entry with a stop below $3,349.
As global uncertainty increases – tariffs and central bank policy – gold is the defensive play. If momentum confirms $3,400 will be less a ceiling and more a springboard. In that case gold will lead the way into Q3’s next big macro story.
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