Gold Price Forecast: Awaiting Catalyst for Volatile Breakout Ahead

Author: James Hyerczyk

Published: July 08, 2025

Key Points

• Gold is trading near $3321.80, with traders focused on Fed minutes and tariffs for a potential breakout.
• New tariffs announced by President Trump on 14 nations are raising inflation fears but have not yet triggered a gold price breakout.
• Traders are awaiting the Fed minutes for any dovish signals that could weaken the dollar and support a gold rally.

Current Market Overview

Gold prices are currently experiencing tight trading conditions, hovering around the 50-day moving average at $3321.80. Key pivot levels at $3310.48 and $3347.97 are defining immediate zones for potential volatility. Traders are on the lookout for a decisive catalyst to break this range, with U.S. tariff developments and the upcoming Fed minutes being the primary focus.

Impact of Tariff Announcements

The announcement of new tariffs by President Trump, which range from 25% to 40% and affect countries such as Japan, South Korea, and Malaysia, has led to an increase in U.S. Treasury yields. The benchmark 10-year yield has risen to a two-week high of 4.415%, while the 30-year yield has reached 4.952%. This rise in yields diminishes the appeal of non-yielding assets like gold.

Despite the inflation concerns stemming from these tariffs, which could potentially revive trade tensions and impact global growth, the gold market has not yet reacted with a breakout. UBS analyst Giovanni Staunovo has indicated that while the tariff extensions are negative for gold, the potential damage to Asian growth prospects could provide some support for gold prices.

Focus on Federal Reserve Minutes

The market is keenly awaiting the Fed's June meeting minutes, which are expected to provide insights into future interest rate policies. Traders are particularly interested in any dovish indications that could lead to a weaker dollar and lower yields, thereby creating a more favorable environment for gold prices to rally.

Currently, the tariffs have heightened inflation concerns, complicating the Fed's rate path. However, without clear signals of policy easing, gold prices remain constrained within their current range.

Technical Analysis and Future Outlook

As rising Treasury yields continue to exert pressure on gold prices, the market is likely to remain in a consolidation phase unless the Fed minutes or further tariff escalations provide a significant catalyst. The technical outlook appears neutral in the near term, with resistance at $3347.97 and support at $3310.48. A dovish Fed could shift sentiment bullishly, while sustained yield strength would likely lean bearish for gold.

Traders should prepare for increased volatility surrounding the Fed minutes, which could serve as the next major driver for the XAU/USD direction.

Conclusion

In summary, gold prices are currently in a holding pattern, influenced by external factors such as U.S. tariffs and upcoming Federal Reserve communications. The market is poised for potential movement, contingent on the outcomes of these developments.