Gold Faces Weekly Loss on Solid US Data and Fading Safe-Haven Demand
Gold (XAU/USD) is poised to record a weekly loss as firmer-than-anticipated U.S. economic data and better global trade sentiment reduced demand for safe-haven assets. Strong labor market data, such as a fourth straight decline in Initial Jobless Claims, combined with fading concerns over trade tensions—most notably gains in U.S.-EU talks—strengthened the U.S. Dollar and dampened investor demand for Gold. Even with declining U.S. Treasury yields, the metal fell to a weekly low of $3,325, with technicals pointing towards further downside risk if important support levels do not hold. The market is now focusing on the coming Federal Reserve decision and important macroeconomic data, such as Q2 GDP, Core PCE, and Nonfarm Payrolls. KEY LOOKOUTS • The markets generally anticipate the Fed to leave interest rates steady; surprises or forward guidance could do much to influence Gold prices. • Solid readings could further bolster the US Dollar and diminish Gold’s attractiveness, while softer data could provide some stimulus for the metal. • A leading indicator of labor market fitness—ongoing strength might support a hawkish Fed profile, which would put pressure on Gold. • Safe-haven demand may remain subdued, pushing Gold lower, with progress towards a deal continuing to weigh and the potential for renewed buying interest after setbacks. Gold prices will close out the week lower as strong United States economic data and fresh trade optimism temper safe-haven demand. A solid rebound in the United States. Dollar, buoyed by stronger-than-anticipated labor market statistics and indications of advancement in US-EU trade negotiations, has kept the precious metal under pressure. Even as U.S. Treasury yields dipped, XAU/USD dipped to $3,325, its third day of losses in a row. Investors now await the next Federal Reserve policy announcement and a series of key economic reports that may influence Gold’s short-term course further. Gold suffers weekly losses due to robust U.S. data and trade optimism weakening safe-haven demand. XAU/USD weakened to $3,325, with players now waiting for the Fed’s next policy decision and major economic releases. • Gold (XAU/USD) slid to a weekly low of $3,325, weighed down by robust U.S. economic data and softening trade tensions. • U.S. Initial Jobless Claims reduced for the fourth week, indicating strength in the labor market and lowering safe-haven demand. • Durable Goods Orders fell by 9.6% in June, yet Core Orders continued to increase by 0.2%, showing the true resilience of underlying business investment. • Trade expectations had improved after the U.S.-Japan deal, and possibly there is more to come before August 1 on an EU agreement. • The U.S. Dollar rebounded in this report, making Gold pricier to foreigners despite falling Treasury yields. • Technical support for Gold is around $3,320, where key SMAs converge and RSI goes bearish. • Future releases such as Fed decision, Q2 GDP, Core PCE, and NFP will play a significant role in determining Gold’s next direction. Gold is set to log a weekly decline amid robust economic data from the United States and softening global trade tensions cutting the metal’s safe-haven demand. Supporting data, such as ongoing declines in Initial Jobless Claims, have continued to prop up expectations for the resilience of the U.S. labor market. At the same time, optimism surrounding trade has gained momentum after an agreement between the U.S. and Japan was finalized, and indications are that a deal with the European Union can be reached ahead of the August 1 deadline. These events have kept investor interest in Gold in check, which normally flourishes during times of insecurity and economic hardship. XAU/USD DAILY PRICE CHART SOURCE: TradingView The U.S. Dollar also picked up momentum this week, making it costlier for foreign buyers to purchase Gold and further testing its attractiveness. Although U.S. Treasury yields have fallen, the optimism in the U.S. economy and trade talks has adequately countered the typical lift Gold gains due to decreasing yields. Market participants are now focused intently on next week’s Federal Reserve interest rate determination and a string of high-impact economics releases, such as GDP, Core PCE, and Nonfarm Payrolls, scheduled to influence market mood and possibly redefine the short-term prognosis for Gold. TECHNICAL ANALYSIS Gold (XAU/USD) has registered three consecutive down days, below the $3,350 level and probing significant support at the confluence of the 20-day and 50-day Simple Moving Averages (SMAs) around $3,342 and $3,332, respectively. The Relative Strength Index (RSI) has become bearish, reflecting waning bullishness in the near term. A sustained break below the $3,320 level would bring out deeper support at the 100-day SMA and the June 30 low of $3,238–$3,246. On the upside, a move above $3,400 would be necessary to regain positive momentum, with possible resistance at $3,438 and the June high of $3,452. FORECAST If future U.S. economic releases, like Q2 GDP or Core PCE, reflect tempering inflation or slowing growth, Gold may re-gain bullish momentum as investors flee to safe-haven assets. Any dovish Federal Reserve tone or any suggestion of future rate cuts can also sustain Gold prices by lessening the opportunity cost of holding non-yielding assets. Geopolitical tensions or stalling in completing trade deals might also fuel the safe-haven demand, which could send XAU/USD higher again above the $3,400 handle. On the other hand, if economic conditions continue to signal strength—particularly via strong Nonfarm Payrolls or resilient consumerism—anticipation of a sustained higher-rate cycle can mount, further pressuring Gold. Further strengthening in the U.S. Dollar and closing of trade agreements, notably with the EU, would certainly bear down on Gold demand. In such an event, XAU/USD may meander down, possibly testing critical support lines around $3,320 or even $3,250 in the near term.
