Gold Holds Firm at $3,350 as Trump Slams Fed Over Rates, US-China Trade Tensions Flare

Gold prices stabilized near $3,350 per ounce despite a disappointing U.S. ADP employment report, which showed only 37,000 private-sector jobs added in May, well below the 115,000 forecast.

President Donald Trump, reacting to the weak data, criticized Federal Reserve Chair Jerome Powell on Truth Social, calling him “too late” to cut interest rates and urging immediate action.

With U.S.-China trade talks faltering and Trump describing Chinese President Xi Jinping as “extremely hard” to negotiate with, safe-haven demand has bolstered gold’s resilience.

As markets await Friday’s Nonfarm Payrolls (NFP) report, expected to show 180,000 jobs added, and the European Central Bank’s (ECB) rate decision, gold remains a focal point amid rising economic uncertainty and global trade strains.

Weak ADP Data Signals Labor Market Concerns

The ADP report, a precursor to the NFP, revealed a mere 37,000 jobs added in May, missing estimates by 68,000 and marking the weakest gain since January 2024. This shortfall has heightened scrutiny on the U.S. labor market, with the unemployment rate steady at 4.2% but at risk of rising to 4.3% in the upcoming NFP, per Bloomberg forecasts.

Trump’s Truth Social post blamed Powell for delaying rate cuts, intensifying pressure on the Fed as inflation hovers at 2.4%, above the 2% target. The CME FedWatch Tool indicates a 55.6% chance of a 25-basis-point rate cut in September, but a July cut remains unlikely at 28%. A weaker-than-expected NFP could boost gold by reinforcing expectations for earlier Fed easing.

US-China Trade Tensions Escalate

The trade negotiations between the U.S. and China have encountered difficulties, particularly after Trump's comments on June 3 characterized Xi as a tough negotiator. The Geneva agreement in May, which paused tariff escalations and reduced U.S. tariffs on Chinese goods from 145% to 30%, appears to be at risk. China’s retaliatory tariffs on U.S. goods, now at 10%, and restrictions on critical mineral exports add to the strain.

The U.S. imposed 50% tariffs on steel and aluminum imports effective July 9, further unsettling global markets. These tensions enhance gold’s appeal as a safe-haven asset, with prices up 15.2% year-to-date in 2025, outperforming the S&P 500’s 11.8% gain.

ECB Rate Decision Looms

The ECB is poised to cut its main deposit rate by 25 basis points to 2.25% on Thursday, supported by Eurozone inflation falling to 2.3% in May from 2.6%. Mixed PMI data signals economic weakness, with Germany’s manufacturing PMI at a six-month low of 42.5, pressuring the ECB to ease further. In contrast, the Fed’s cautious stance, driven by persistent U.S. inflation and Trump’s tariff-driven price pressures, limits near-term rate cut prospects.

Gold, which yields no interest, faces headwinds from higher rates but benefits from economic uncertainty, with analysts projecting a potential rise to $3,500 by Q4 2025 if trade wars intensify.

Did You Know?
Gold has risen 15.2% in 2025, driven by safe-haven demand, outpacing the MSCI Emerging Markets Index’s 6.7% gain, as trade tensions and inflation fears boost its appeal.

Gold’s Technical Outlook

Gold prices are consolidating above a symmetrical triangle on the daily chart, holding near the psychological $3,350 level. The 20-day Simple Moving Average at $3,292 provides support, with the 23.6% Fibonacci retracement at $3,290 reinforcing this zone. A break below could target $3,057, while sustained trade above $3,350 may challenge the all-time high of $3,790 from October 2024.

The Relative Strength Index at 55 suggests mild bullishness, but a breakout hinges on NFP data and trade developments. Gold’s stability reflects its role as a hedge against geopolitical and economic risks, despite a muted reaction to the ADP miss.