Gold Price Forecast: XAU/USD climbs above $3,350 as Trump rekindles trade tensions

• Gold price drifts higher to near $3,365 in Monday's early Asian session. 
• Trump's announcement of new tariffs on the EU and broader tariff threats against other trading partners lifted demand for Gold. 
• Fed's Goolsbee said the latest tariff threats could delay rate cuts.

The Gold price (XAU/USD) extends its upside to around $3,365 during the early Asian session on Monday. The precious metal edges higher as traders rushed toward the traditional safe-haven assets after US President Donald Trump widened the global trade war with a fresh wave of tariffs.

On Saturday, Trump said that the United States (US) will impose a 30% tariff on goods from the European Union (EU) and Mexico that will take effect on August 1. Trump also announced a 35% duty on Canadian imports and proposed a blanket tariff rate of 15%-20% on other trading partners last week, along with a 50% tariff on copper imports. Concerns over the impact of Trump's latest tariffs boost the yellow metal as investors seek shelter from trade tensions. 

Additionally, the persistent geopolitical tensions in the Middle East might contribute to the Gold's upside. Reuters reported that at least eight Palestinians were killed and more than a dozen were wounded while collecting water in central Gaza on Sunday. The Israeli military said the missile had been intended to hit an Islamic Jihad militant in the area but that a malfunction had caused it to fall "dozens of metres from the target". Steve Witkoff, Trump's Middle East envoy, stated on Sunday that he was "hopeful" about the Gaza ceasefire discussions that were taking place in Qatar.

On the other hand, the cautious stance of the US Federal Reserve (Fed) might cap the upside for the precious metal. The US central bank is widely anticipated to hold interest rates steady as it waits to see the impact of tariffs on price pressures. Chicago Fed President Austan Goolsbee said that fresh tariffs unveiled by Trump have further muddied the inflation outlook, making it more difficult for him to support the rate cuts that the President has pressed for.