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Gold Surges Past $3,340 as Trump Tariffs Ignite Safe-Haven Demand
Economic
Summary:
Gold prices surged above $3,340 on Friday after U.S. President Donald Trump slapped a 35% tariff on all Canadian imports, igniting fears of a broader global trade war.
Buy
TradingXAUUSD
EXP
3349.67
Entry Price
3400.00
TP
3310.00
SL
3355.58 +31.77 +0.96%
0
Point
Flat
3310.00
SL
CLOSING
3349.67
Entry Price
3400.00
TP
Gold (XAU/USD) roared higher on Friday, breaching the $3,340 mark and extending its bullish streak as escalating trade tensions overshadowed the impact of rising U.S. Treasury yields. The surge in demand for the yellow metal was triggered by a dramatic escalation in protectionist rhetoric from former U.S. President Donald Trump, who announced sweeping tariffs on Canadian goods—a move that sent shockwaves through global financial markets and rekindled fears of a 2018-style global trade war.
In an unexpected and aggressive policy shift, Trump declared that all Canadian imports to the United States would be subject to a 35% tariff effective August 1. The announcement stunned markets given the deeply integrated nature of the U.S.-Canada trade relationship. According to Statistics Canada, over 76% of Canadian exports in 2024 have been destined for the U.S. economy. The magnitude and scope of the tariff raise the stakes dramatically for both economies and the global trade system at large.
Trump’s comments didn’t stop with Canada. In a statement that left analysts scrambling to assess the geopolitical fallout, he hinted that similar tariffs could be extended to other nations: “We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now.”
That vague but threatening language stoked fresh volatility, with investors rushing into traditional safe-haven assets like gold, the Swiss franc, and U.S. Treasuries. The prospect of a domino effect in global tariff escalation reintroduced a strong geopolitical risk premium to the market — an environment in which gold typically thrives.
Notably, this move from Trump comes at a time when central banks globally have already been walking a monetary tightrope, attempting to tame inflation without derailing growth. The threat of a major trade disruption complicates that calculus, particularly for the Federal Reserve, which has been battling sticky inflation while weighing the risks of overtightening.
Ordinarily, a rise in U.S. Treasury yields would act as a headwind for gold, a non-yielding asset. However, Friday's market reaction underscored how risk aversion can override traditional rate dynamics. The benchmark U.S. 10-year yield climbed toward 4.40%, yet gold’s upward momentum remained intact, underpinned by a rush to preserve capital in the face of uncertain global trade policy.
“The move is reminiscent of the 2018 trade war episode,” said a senior FX strategist at Saxo Markets. “Back then, gold rallied despite a strong dollar and climbing yields. Right now, we’re seeing a similar flight to safety. The bigger the uncertainty, the more attractive gold becomes.”
Technical Analysis
From a technical standpoint, gold’s intraday surge was further validated by a clean break above a short-term bearish correctional trendline, reinforcing the underlying bullish structure. The move was bolstered by the commodity’s positioning above the 50-period Exponential Moving Average (EMA50), a dynamic support zone that has acted as a launchpad for recent upward thrusts.
Additionally, momentum indicators such as the Relative Strength Index (RSI) have flipped back into positive territory, suggesting that buyers remain in control and that there’s room for further gains before the metal enters overbought conditions.
Initial resistance is eyed near $3,360, with a successful breach potentially opening the path to test the psychologically significant $3,400 barrier. On the downside, $3,300 now becomes a critical support level, with the EMA50 reinforcing that zone as a pivot.
TRADE RECOMMENDATION
BUY GOLD
ENTRY PRICE: 3350
STOP LOSS: 3310
TAKE PROFIT: 3400
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