Market Focuses on Trade Frictions as Gold Breaks Above $4,200

Recent U.S.–China trade tensions have once again drawn global market attention, though both sides appear to be softening their rhetoric. U.S. Treasury Secretary Bessent stated that the 100% tariffs on Chinese goods “may not necessarily take place,” adding that both nations could reach an agreement within weeks to avoid escalating the trade conflict. The remarks were viewed as the first tangible sign of de-escalation from Washington.

Several U.S. media outlets noted that the administrations mixed messages on trade reveal internal divisions. While senior White House officials maintain a tough public stance, the actual enforcement may end up being “more bark than bite.” Markets broadly expect that a moderate easing of trade policies would help reduce inflationary pressures and dampen global demand for safe-haven assets.

Meanwhile, domestic political uncertainty continues to mount. A federal court in San Francisco issued a temporary restraining order blocking the Trump administration from conducting large-scale layoffs during the ongoing government shutdown. The order directs more than 20 federal agencies involved in the case to halt layoff notices until further review. Reports indicate that over 4,000 federal workers have already received termination notices, and White House budget chief Russell Vought warned that if the shutdown persists, the total number of layoffs could exceed 10,000.

Under the combined weight of political and trade pressures, the Federal Reserve has adopted a more dovish tone. Fed Governor Stephen Milan, appointed by Trump, noted that rising trade uncertainty has increased downside risks to growth, arguing for prompt rate cuts. He emphasized that two additional rate cuts this year “sound realistic,” signaling a growing consensus within the Fed toward monetary easing.

In its latest Beige Book, the Fed reported little change in overall U.S. economic activity since early September. However, tariffs have added upward pressure on prices, and consumer spending has edged lower. Employment remains broadly stable, though many firms have begun trimming staff through layoffs or attrition. With the government shutdown delaying key economic data releases, the anecdotal insights provided by the Beige Book have become especially valuable.

Overall, the softer tone from both Washington and Beijing has helped stabilize market sentiment. Combined with rising rate-cut expectations and political uncertainty, safe-haven demand has strengthened. Analysts note that amid a slowing global economy, a weaker U.S. dollar, and persistent inflation pressures, gold is likely to remain supported by haven flows and may establish a technical support zone near the $4,000 level.

Gold Technical Analysis

Traders should watch the resistance level at $4,250 per ounce.

If prices fail to break above $4,250 and pull back, gold is expected to consolidate within the $4,250–$4,200 range, providing opportunities for short-term range trading strategies — selling near the highs and buying near the lows.

• Resistance: $4,250 / oz

• Support: $4,200 / oz

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