Dollar Slips Ahead of Tariff Deadline; Gold Hits 5-Week High on Safe-Haven Demand

Key Takeaways:

*Dollar Index weakens as tariff risks and political pressure weigh.

*Gold rallies to a 5-week peak amid defensive positioning and lower Treasury yields.

Market Summary:

The U.S. dollar remained under pressure, with the Dollar Index extending losses as trade tensions and political uncertainty dominated sentiment. As the August 1st tariff deadline approaches, investors grew wary of potential higher tariffs on U.S. trading partners that fail to reach deals—dampening risk appetite for the greenback.

Confidence in the Federal Reserve’s independence also took a hit after President Trump renewed threats to dismiss Fed Chair Jerome Powell, reinforcing expectations for interest rate cuts. This added pressure to U.S. Treasury yields, which continued their descent, further undermining dollar demand.

Gold surged to its highest level in five weeks as investors shifted toward safe-haven assets. The weaker dollar, falling yields, and ongoing global trade uncertainties boosted gold’s appeal. Traders remain defensive ahead of key catalysts: the Fed’s rate decision, Powell’s job security, and further U.S.-China trade headlines.

Technical Analysis 

DXY H4: 

The index broke below the key support of 97.80, weighed by weak yields and a bearish crossover on moving averages. Price action now eyes the next support at 97.20.

*MACD indicates slowing bearish momentum.

*RSI at 32 suggests potential oversold conditions, hinting at a possible rebound.

 If the index fails to hold above 97.20, further downside toward 96.50 could be in play. Conversely, a bounce may bring a re-test of 97.80 resistance.

Resistance Levels: 98.55, 99.25
Support Levels: 97.80, 97.20

GOLD, H4:

Gold is testing the key resistance near 3435.00 (Fibonacci expansion). A confirmed breakout may open the way toward 3475.00.

* MACD shows fading bullish strength.

* RSI at 70 signals overbought conditions, suggesting risk of a near-term pullback.

If unable to breach resistance, price could consolidate between 3435.00 and support at 3395.00.

Resistance level: 3435.00, 3475.00

Support level: 3395.00, 3350.00