Gold prices retreat from intraday highs on Friday, facing pressure from a risk-on market environment and modest rebound in the US Dollar. Despite dipping from recent peaks, XAU/USD finds underlying support amid renewed global trade worries and increasing expectations of a Federal Reserve rate cut in September.
🟡 Key Market Drivers Weighing on Gold:
- Investor sentiment turns cautious after US President Donald Trump’s tariff escalation on Indian goods, aimed at punishing oil trade with Russia. The move follows earlier announcements of upcoming levies on semiconductors and pharmaceutical imports.
- China’s central bank extends gold purchases for the ninth month in a row, reinforcing global demand and cushioning downside pressure on the metal.
- The US Dollar bounces off recent lows, driven by upbeat equity markets across Asia, triggering profit-taking in gold after its steady rise this week.
- US economic data signals softness, with jobless claims climbing for the second straight week and nonfarm payrolls indicating a cooling labor market.
- Traders now price in over 90% odds of a Fed rate cut next month, with two more cuts expected by year-end, according to CME’s FedWatch tool.
🔍 Technical Snapshot: Can Gold Regain $3,400?
Gold attempted to break higher during Asian trading hours but faced strong resistance near $3,422–$3,435, close to its multi-week trend ceiling. While momentum favors the upside, a sustained move above $3,400 is essential to confirm further gains.
- Immediate resistance: $3,422–$3,435
- Key breakout point: $3,310–$3,315
- Upside target: $3,500 (April peak)
On the downside, any dip below $3,385–$3,383 may attract buyers, with strong support seen near the 200-period SMA at $3,350. A decisive break lower could shift momentum towards $3,300 and then $3,268, last month’s low.
🗣️ What’s Next?
In the absence of major economic releases, traders will focus on upcoming speeches by FOMC policymakers. Meanwhile, Trump’s nomination of Stephen Miran for a Fed governor role and potential replacements for Jerome Powell add further intrigue to the Fed’s future direction.
Stay updated with real-time gold insights and market trends at www.dailygold.pk