Gold targets $3,400 as Trump’s tax bill and Fed uncertainty grow
As political tensions and economic crosscurrents make markets more volatile, gold prices rise. As of Tuesday, the yellow gold (XAU/USD) was trading at $3,350, drawing closer to the key $3,400 resistance level. Investors are looking to gold for safety due to concerns about inflation, a lack of clear monetary policy, and political instability in Washington.
The current protest centers on the “Big Beautiful Bill,” a tax overhaul advocated by former President Donald Trump. The law has been widely condemned by both parties since it will add $3.3 trillion to the US deficit. Elon Musk and other prominent business leaders have expressed concern about the impact on inflation. As the markets consider what mounting government debt entails, gold’s appeal as a hedge against the dollar’s collapse and uncertain finances grows. Learn more about Elon Musk’s post.
Jerome Powell, the president of the Federal Reserve, also issued cautious remarks at the ECB Forum in Portugal, which aided the surge. Powell emphasized a “meeting-by-meeting” strategy, which kept hopes for a rate cut in September alive, despite economic data such as the ISM Manufacturing PMI and JOLTs report indicating resilience. Investors are still concerned as political pressure increases. Trump recently slammed Powell’s delayed answer in a Truth Social post, which heightened concerns about the Fed’s independence.
Technically, gold’s recovery from trendline support and increasing RSI suggest that it could rise significantly further. If the price breaks above $3,371, it may attempt the $3,400 mark.
Also read: XRP Price Cannot Break Higher Despite Strong Institutional Demand and Derivatives Momentum