Gold (XAU/USD) slipped in Monday’s early European trading session, pressured by a stronger US Dollar. The yellow metal trades near $3,350 per ounce, showing weakness but holding ground as investors weigh Jerome Powell’s dovish remarks from Jackson Hole alongside growing geopolitical risks.
Powell’s Remarks Support Rate Cut Expectations
At the annual Jackson Hole symposium, Fed Chair Jerome Powell hinted that the US Federal Reserve could move toward a rate cut in September. He acknowledged that the economy faces a “challenging situation,” with inflation risks still high but labor market pressures pointing downward.
Lower interest rates generally support gold by reducing the opportunity cost of holding non-yielding assets, keeping traders hopeful that policy easing will benefit the yellow metal in the months ahead.
Geopolitical Tensions Add to Gold’s Safe-Haven Appeal
Beyond monetary policy, geopolitical headlines are also influencing gold prices. Ukrainian President Volodymyr Zelensky reaffirmed the country’s fight for freedom, rejecting peace talks without meaningful concessions. Meanwhile, Russia blamed Ukraine for drone attacks that caused fires at energy sites, adding to global uncertainty.
Such tensions provide an additional layer of support for gold as a safe-haven asset.
Market Movers and US Data in Focus
- Fed officials remain cautious: St. Louis Fed’s Alberto Musalem called for more economic data before supporting a rate cut, while Boston Fed’s Susan Collins warned that tariffs could have longer-lasting inflationary effects.
- Upcoming GDP report: Traders are closely watching the US Q2 GDP release on Thursday, expected at 3.0% annual growth. A stronger reading could push the dollar higher and weigh further on gold.
- Physical demand: Buying in key Asian markets remains subdued due to volatility, though Indian jewelers are preparing for festival demand.
Gold Technical Outlook – Support and Resistance Levels
- Immediate resistance: $3,400–$3,410 (psychological barrier and Bollinger Band top). A breakout above this zone could open the way toward $3,439 (July 23 high), and eventually $3,500 (April peak).
- Key support: $3,315 (August 19 low). A drop below could test $3,285 and $3,268, near the 100-day EMA.
The Relative Strength Index (RSI) remains near neutral, signaling potential consolidation before a decisive move.
✅ Summary: Gold faces selling pressure due to a firm US Dollar, but dovish Fed signals and geopolitical risks continue to cushion the downside. Traders await Powell’s speech follow-up and Thursday’s US GDP data for the next clear direction.
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