Gold Price Steadies at $3,340 as Policy Risks Roil Stock Market

XAU/USD Faces Macro Tug-of-War as Price Stalls Below $3,350 Amid Policy Shocks and Rate Cut Tension

Gold (XAU/USD) Volatility Intensifies as Market Holds Breath Before July 9 Tariff Deadline

Gold prices have entered a tightening coil near $3,340 as traders weigh a cascade of macroeconomic contradictions: Trump’s July 9 tariff reimplementation, uncertainty around the House vote on a $3.3 trillion tax bill, a whipsawing labor market, and imminent Federal Reserve policy recalibration. The yellow metal surged from Monday’s dip below $3,300 to an intraday high of $3,350 Wednesday morning, before paring gains amid a modest US Dollar bounce and risk-on sentiment. Still, with gold (XAU/USD) up 43.7% year-over-year, the asset remains a focal hedge against both geopolitical instability and the Fed's uncertain path.

Gold Futures (GC=F) Hover Near Resistance as Fed, Trump Inject Volatility

Gold futures opened at $3,350 per ounce, up 0.4% from the previous close of $3,336.70. The move reflects a 0.9% gain over the past week and 1.6% over the month, as bulls attempt to hold ground near critical resistance levels. Momentum, however, is tentative. The 20-day SMA at $3,350 is capping upside attempts, while the Relative Strength Index hovers near 52, indicating neutral sentiment. Meanwhile, technical traders watch $3,358 as a near-term breakout point, above which the $3,400 psychological threshold and the June high at $3,452 come into play.

Below current levels, immediate support lies near $3,321 and $3,300, with a deeper breakdown targeting the Fibonacci 50% retracement at $3,229 and the $3,175 zone highlighted by HSBC.

Gold Price Forecasts Escalate: HSBC, Goldman Raise Targets

HSBC has revised its average gold price outlook to $3,215/oz for 2025 and $3,125/oz for 2026, up from prior forecasts of $3,015 and $2,915. The bank expects trading to remain volatile within a $3,100-$3,600 range, with year-end targets of $3,175 and $3,025 for the next two years. Central bank buying is expected to soften on rallies above $3,300 but may accelerate again if gold corrects toward $3,000.

Goldman Sachs projects a much more aggressive trajectory, targeting $3,700 by year-end and $4,000 by mid-2026, with extreme risk scenarios priced as high as $4,500. Goldman expects gold to continue outperforming silver due to lagging industrial demand in China’s solar sector.

Fed Uncertainty and ADP Jobs Shock Add Tailwinds to Gold

The ADP Employment Change report shattered expectations with a -33K reading versus a +95K forecast, suggesting acute weakness in the labor market. This amplifies rate-cut probabilities. The market now prices a 20% chance of a July cut and a 75% probability of a September cut. Fed Chair Jerome Powell reiterated a data-dependent stance, while Fed Governor Christopher Waller said the Fed "should not wait for the job market to crash" before easing. These dovish signals have capped USD recovery and supported gold.

In parallel, the ISM Manufacturing PMI rose to 49.0 in June, beating expectations of 48.8 but still signaling contraction. The JOLTS report showed 7.769 million job openings, up from 7.395 million in April, reflecting a still-mixed labor picture. This tug-of-war fuels gold's appeal as a non-yielding asset in a landscape of fiscal instability and policy hesitation.

Trump’s Trade Brinkmanship Sparks Gold Safety Demand

President Trump’s July 9 deadline to reimpose reciprocal tariffs looms large. His threats to penalize Japan for avoiding US rice purchases, and mixed progress on deals with China and the EU, have reignited trade war fears. The prospect of inflationary pressure from renewed tariffs boosts gold's safe-haven demand. Trump’s proposed $3.3 trillion "Big Beautiful Bill," which passed the Senate and heads to the House, has stirred bipartisan concern over deficits and USD devaluation—a dynamic that further strengthens gold's hedge status.

Gold Price Technical Structure Shows Ascending Triangle Tension

XAU/USD continues to build within an ascending triangle on the daily chart. The horizontal resistance at $3,500 and the rising support trendline from the April low of $2,957 frame the breakout potential. A decisive close above $3,500 opens the door to $3,550 and $3,600. Conversely, a drop below $3,245 risks a slide to $3,200 or even $3,121. The RSI between 40-60 confirms indecision, while price action sits precariously near the 20-day EMA at $3,342.

Gold Investment Options Highlight Diverging Risk Profiles

Physical gold remains preferred for emergency liquidity and absence of fees but suffers from low liquidity and theft risk. Mining stocks like Barrick Gold (GOLD) and Franco-Nevada (FNV) offer higher liquidity but introduce company-specific volatility. ETFs like SPDR Gold Shares (GLD) provide direct gold price exposure with strong liquidity and storage ease, yet incur management fees and lack barter utility. The choice between these reflects investor conviction in inflation, market disruption, and safe-haven rotation.

Verdict: XAU/USD = BUY (Target $3,452 Short-Term, $3,700 Medium-Term)

The technical structure, macro catalyst loadout, and global capital rotation into safe assets justify a bullish bias on gold. Any sustained move above $3,358 is likely to propel XAU/USD toward $3,400 and beyond. With ETF inflows steady, central bank interest firm above $3,000, and macro instability unresolved, the metal is well-positioned to retest the $3,452 high, en route to Goldman’s $3,700 projection. The only caveat remains near-term resistance from a rebounding USD and lighter physical demand at extreme highs, but the broader structural setup is undeniably bullish.

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