Fundamental Overview
Gold prices are correcting after reaching a fresh all-time high yesterday, pressured by a stronger U.S. dollar. The greenback is rebounding after a two-day decline, supported by remarks from Federal Reserve Chair Jerome Powell, who pushed back against aggressive rate-cut expectations. Powell emphasized that the Fed must balance risks of persistent inflation and a weakening labor market, warning that premature easing could undermine inflation control and force later adjustments.
On the geopolitical front, safe-haven demand for gold remains underpinned by rising tensions:
-
NATO has warned Russia it is prepared to take “all necessary measures” following repeated airspace violations over Estonia, Poland, and Romania.
-
In the Middle East, Israel continues its Gaza operations, while a UN report suggests intentions for permanent control over Gaza and a stronger presence in the West Bank—fueling concerns of conflict escalation.
These risks are keeping gold attractive to investors despite short-term dollar strength.
Key Events to Watch
Markets will closely monitor upcoming U.S. economic data for direction:
-
Thursday: Final Q2 GDP (3.3% y/y expected) and durable goods orders (-0.3% forecast).
-
Friday: Core PCE price index, the Fed’s preferred inflation gauge.
These releases could significantly influence the dollar and gold’s near-term path.
Technical Outlook
-
Gold’s recent surge largely ignored overbought signals, underscoring strong underlying demand.
-
However, yesterday’s rejection ahead of the round 3800 level shows fading bullish momentum.
-
Immediate support: $3710–$3700. A decisive break below this zone could deepen the correction, targeting lower levels.
-
Upside confirmation: A sustained breakout and consolidation above $3800 would reaffirm the bullish trend and open the path toward fresh record highs.
Trading View
-
Bullish bias remains intact in the medium term, supported by geopolitical risks and strong demand on dips.
-
Near-term caution is warranted until price action confirms a breakout above 3800.
-
If gold stabilizes above $3710, buyers may re-enter; otherwise, a deeper retracement could develop.
Gold remains in a bullish trend but faces short-term consolidation risks. The $3800 level is the key threshold for fresh upside momentum, while $3710–$3700 acts as critical support. Traders should watch upcoming U.S. economic data for the next directional catalyst.
