Gold prices resumed their upward trend on Friday, rallying fo
Quick overview
- Gold prices increased by 5% this week as the US dollar declined amid escalating trade tensions with the EU.
- XAU/USD is currently trading at $3.35K, with expectations to test the $3.4K mark following a recovery from a low of $3.28K.
- The Relative Strength Index suggests strong bullish momentum for gold, indicating potential for further price increases.
- Concerns over the US fiscal stance and a recent downgrade of US government debt have contributed to a positive outlook for gold.
Gold prices resumed their upward trend on Friday, rallying for the 5% week as the US dollar continued to decline following US President Donald Trump’s escalation of the “trade war” with the European Union (EU).
The bullion asset is expected to test the $3.4K mark with XAU/USD trading at $3.35K after recovering from a daily low of $3.28 K. Investors’ concerns about the US fiscal stance drive bullion prices higher.
The Relative Strength Index (RSI), which has sufficient room to move upward before becoming overbought, indicates that bullish momentum remains strong.
Trump threatened to impose 50% tariffs on EU imports on June 1, and the talks with the EU “are going nowhere” before Wall Street opened. “The president feels that the EU proposals have not been of the same quality that we’ve seen from our other important trading partners,” added US Treasury Secretary Scott Bessent.
The passage of Trump’s “One Big Beautiful Bill” in the US House of Representatives, which would raise the US debt ceiling by nearly $4 trillion, supported gold.
After that, the bill will be sent to the Senate for approval.
The precious metal’s outlook is positive given the shaky market sentiment toward US assets brought on by the widening US fiscal deficit, which prompted Moody’s to downgrade US government debt from AAA to AA1, It is projected that the US lower house’s approved fiscal package will result in a $4 trillion increase in the debt ceiling.
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 15 years of working experience in investment trading.
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