Gold (XAU/USD) rebounded from a two-week low on Monday, supported by falling US bond yields and growing expectations of Federal Reserve rate cuts in September. The precious metal held modest gains during the European session, although a lack of strong follow-through buying suggests traders remain cautious ahead of key economic and geopolitical events.
Market Overview
- Spot Gold: Trading at $3,341.70 per ounce (+0.2%)
- Gold Futures (December): At $3,387.80 (+0.1%)
The weaker bond yields and renewed speculation of Fed easing continue to support gold, while a modest uptick in the US Dollar and a stronger risk appetite in global markets have limited further upside. Traders are closely watching the upcoming FOMC Minutes and Federal Reserve Chair Jerome Powell’s speech at Jackson Hole for confirmation of the Fed’s rate-cut path.
At the same time, geopolitical focus remains on a meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and European leaders to discuss a peace deal with Russia — a development that could influence safe-haven demand.
Key Market Drivers
- Federal Reserve Outlook: Markets now expect at least two 25-basis-point cuts before year-end, with September widely anticipated to mark the beginning of a new easing cycle.
- US Economic Data:
- Producer Price Index (PPI) rose at the fastest pace since 2022, dampening expectations for a larger 50 bps cut.
- Consumer Sentiment Index dropped to 58.6 in August, showing weaker public confidence.
- Retail Sales rose 0.5% in July, in line with expectations.
- Inflation Expectations: The University of Michigan survey showed one-year inflation expectations rising to 4.9% and five-year outlook to 3.9%, highlighting persistent price pressures.
- Geopolitical Risks: The Trump-Zelenskyy meeting and European involvement in peace talks with Russia remain key for short-term safe-haven flows.
Technical Analysis – Gold (XAU/USD)
Gold has bounced from the 61.8% Fibonacci retracement of its July low and reclaimed the 200-SMA on the 4-hour chart. Indicators are showing renewed positive momentum:
- Upside Targets:
- Immediate resistance at $3,355 (50% Fibo level).
- Breakout could lead toward $3,372–$3,374 zone, with potential to reclaim $3,400 and retest the monthly peak at $3,408–$3,410.
- Downside Support:
- Initial support at $3,346 (200-SMA H4).
- Stronger support around $3,324–$3,323 (61.8% Fibo level).
- A break below could expose $3,300 and then $3,282–$3,268, the late-June swing low.
Short-Term Outlook
Gold prices are likely to remain range-bound but supported, with markets awaiting clarity from the Fed and geopolitical talks. The overall technical structure favors a potential move toward $3,375 resistance, but failure to hold above key support levels could trigger deeper corrective pressure.
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