Gold prices climb past $3,350 as Trump’s trade war with the EU escalates, weakening the US dollar and boosting investor interest in gold. Learn about market trends, key price levels, and what’s next for gold.
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Why Gold Prices Are Rising
Gold prices jumped nearly 2% on Friday, reaching $3,359, with a weekly gain of 5%. This surge happened because the US dollar weakened after President Donald Trump increased tensions in the trade war with the European Union (EU). Investors are also worried about the growing US debt, which is pushing gold prices higher.
Trump’s Trade War with the EU
Before the stock market opened, Trump said talks with the EU were not going well. He threatened to place 50% tariffs (taxes on imports) on EU goods starting June 1. US Treasury Secretary Scott Bessent added that the EU’s trade proposals were not as good as those from other countries the US works with. This news made investors nervous, causing them to buy more gold as a safe investment.
US Debt Ceiling and Gold
Gold prices also got a boost after the US House of Representatives passed Trump’s “One Big Beautiful Bill.” This bill could add $4 trillion to the US debt ceiling, and it’s now headed to the Senate for approval. When debt rises, investors often turn to gold, which is seen as a safe store of value.
Other News Affecting Gold
Geopolitical Updates
In other news, Russia’s Foreign Minister said progress is being made on a ceasefire in Ukraine. Meanwhile, the US and Iran finished their fifth round of talks in Rome about Iran’s nuclear program. These global events can influence investor confidence and gold prices.
US Economic Data
Recent US housing data showed mixed results. Building Permits dropped sharply, but New Home Sales improved in April. Also, several Federal Reserve officials, including Alberto Musalem from St. Louis and Austan Goolsbee from Chicago, shared their views on the economy, which investors are watching closely.
What’s Coming Next Week
Next week, important US economic reports will be released, including:
- Durable Goods Orders
- The Federal Reserve’s last meeting minutes
- The second estimate of GDP
- The Core Personal Consumption Expenditures (PCE) Price Index, which is the Fed’s favorite measure of inflation
These reports could impact the US dollar and gold prices.
Gold Price Outlook: What’s Next for XAU/USD?
Technical Analysis
Gold (XAU/USD) is on an upward trend, with prices breaking above $3,350. The Relative Strength Index (RSI), a tool that measures market momentum, shows that gold has room to keep climbing before it becomes overbought.
Key Price Levels to Watch
- Upside Targets: If gold keeps rising, it could reach $3,400, then $3,438 (the high from May 7), and possibly $3,450 or even the all-time high of $3,500.
- Downside Risks: If gold falls below $3,300, it might drop to $3,204 (the low from May 20) or the 50-day Simple Moving Average at $3,199.
