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Commodities Gold

Gold Fails to Hold Above $3,500 on Fed Rate Cut Expectations and Geopolitics

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  • September 2, 2025
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Gold continued its streak of gains to a new record high of more than $3,500 on rising bets of a September rate cut by the Fed, ongoing safe-haven demand, and escalating geopolitical tensions. The metal, however, could not find firm acceptance above the important psychological level due to a limited U.S. Dollar recovery and overbought levels dampening upside momentum. Investors now shift their attention to future U.S. macroeconomic statistics, such as the ISM PMI, JOLTS, and Friday’s pivotal Nonfarm Payrolls report, for new indications on the Fed policy trail and the next gold directional bias. KEY LOOKOUTS • Ongoing market optimism on a September rate cut continues to drive solid buying demand for gold. • Gold finds it hard to gain acceptance above the $3,500 psychological level, with overbought indicators calling for caution. • Russia-Ukraine tensions, Middle East hostilities, and U.S. tariff wars are fueling safe-haven demand. • ISM PMI, JOLTS, ADP jobs report, and Nonfarm Payrolls are some economic indicators that might prescribe the next directional move in gold. Gold is still riding an extremely bullish wave, with expectations of a Fed rate cut in September and ongoing safe-haven flows in the face of global uncertainties. The precious metal briefly touched a record peak above $3,500 but struggled to sustain gains at this psychological level as a modest U.S. Dollar rebound and overbought technical conditions capped further upside. Meanwhile, geopolitical risks and U.S. tariff disputes remain in focus, keeping demand for gold intact. Investors now await key U.S. economic data releases this week for fresh direction, with particular attention on Friday’s Nonfarm Payrolls report. Gold reached a new record of over $3,500, boosted by bets on Fed rate cuts and safe-haven demand, but was unable to hold gains at the critical level. Future U.S. economic indicators, such as the Nonfarm Payrolls report, will probably decide its future direction. • Gold set a new all-time high at over $3,500 in the Asian session. • Increasing hopes of a September Fed rate cut continue to propel demand. • Safe-haven flows are robust in the face of geopolitical tensions and tariff wars. • The U.S. Dollar’s weak pullback put an end to gold’s upside momentum. • Overbought technical levels warn of caution ahead of further uplift. • Important U.S. economic data releases this week, including NFP, will dictate the next direction. • Support is near $3,440, and resistance is at the $3,500 psychological level. Gold continues to be in the limelight as investors increasingly factor in the possibility of a Federal Reserve cut in interest rates this September, keeping the non-yielding asset in demand. The safe-haven demand for gold has also been strengthened by increased geopolitical tensions, such as rising tensions in Eastern Europe and the Middle East, and continued uncertainty regarding U.S. tariffs. All these have combined to provide a bullish climate for bullion, with market players looking for stability in the face of economic and political instability. XAU/USD DAILY PRICE CHART SOURCE: TradingView Adding to the trend, fears over the Federal Reserve’s independence have joined the fray following recent political meddling and attacks on its leadership. This has further agitated investors, who have gone out looking for refuge in gold. Meanwhile, focus now turns to a string of high-impact U.S. economic data releases due to come out over the next week or so, which should give us more insight into the Fed’s policy direction. In the meantime, gold should continue to hold strong attraction as an investment hedge and as a gauge of generalized market uncertainty. TECHNICAL ANALYSIS Gold’s recent break above the $3,440 resistance level put an end to its multi-month consolidation and indicated very bullish strength. But the metal has not been able to maintain firmly above the $3,500 psychological handle, indicating that bulls are getting nervous at higher prices. The daily Relative Strength Index (RSI) is flashing overbought, signaling the likely probability of a short-term pullback or consolidation before advancing the next leg higher. On the flip side, near-term support rests at $3,475–$3,474, with the $3,440 pivot zone in tow, which should see fresh buying interest if touched. FORECAST If bullish momentum strengthens again, gold may decisively break above the $3,500 psychological level and set the stage for additional gains. Ongoing safe-haven flows in the face of ongoing geopolitical tensions, combined with increasing confidence in a September Fed rate cut, would offer robust tailwinds to buyers. A persistent break above this point may have gold tracing new record highs, as investors want shelter from uncertainty in global politics and monetary policy alike. Conversely, inability to find acceptance at prices above $3,500 might prompt some profit-taking and a corrective pullback. Short-term overbought levels, along with some modest U.S. Dollar improvement, might bear down on prices. Under such circumstances, gold could retest the $3,475–$3,474 level, while a further slide could find support near $3,440. A firm breach through this level could attract more selling pressure and drive the metal towards the $3,410–$3,400 area.

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Commodities Gold

Gold Price Falls on Trade Optimism and Lower Fed Rate Cut Expectation

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  • May 15, 2025
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Gold prices keep on falling as a relaxation of US-China trade tensions and shrinking hopes of aggressive Federal Reserve rate cuts cut down the demand for the safe-haven asset. The temporary agreement on trade and evidence of economic resilience in the US has lifted Treasury yields, further pressuring non-yielding gold. In spite of recurring geopolitical tensions and a weaker sentiment in equity markets, XAU/USD touched its lowest mark since early April, breaching important technical levels of support. Investors now eye the forthcoming US Producer Price Index data and Federal Reserve Chair Jerome Powell’s speeches for new cues, as gold’s outlook stays firmly bearish. KEY LOOKOUTS • Due for release later today, the PPI will provide clues on inflation trends and impact the Fed’s monetary policy direction going forward, affecting gold prices. • Traders will be attentive to Powell’s remarks for hints on the rate cut path, which may influence market sentiment and determine USD and gold price direction. • Increasing yields are still putting pressure on non-yielding assets such as gold. A sustained rally might help amplify bearish momentum in XAU/USD. • Escalating tensions in the Middle East and actions in the Ukraine-Russia conflict might provide minimal support to gold, but so far, these have not been adequate to turn around the current selling sentiment. Market participants must closely monitor a few important factors driving gold prices in the short term. The release of upcoming US Producer Price Index (PPI) numbers and a speech by Federal Reserve Chairman Jerome Powell are slated to provide fresh views on inflation and monetary policy that could markedly shift market mood. Moreover, a continued up move in US Treasury yields has kept non-yielding assets such as gold firmly in the dovish camp. Although geopolitical threats, such as tensions in the Middle East and the Ukraine-Russia conflict, continue to exist, they have not so far been contributing positively to gold prices amidst prevailing macroeconomic forces. Gold prices are still under pressure as declining US-China trade tensions and lowered Fed rate cut hopes push investors out of safe-haven assets. Upcoming US PPI and speech by the Fed Chair Powell are major events that could dictate the next direction in XAU/USD. Higher bond yields and technical breakdowns also add to the bearish scenario. • Gold prices fell to $3,135, the lowest since April 10, under persistent selling pressure. • US-China trade optimism cut safe-haven demand, as a 90-day tariff ceasefire put recessionary fears aside. • Fed rate cut expectations have fallen, and markets are now pricing in just about 50 basis points of easing this year. • Increasing US Treasury yields continue to pressure gold, which does not pay any yield and loses attractiveness in a rising rate environment. • Middle East and Ukrainian geopolitical tensions remain but have not managed to trigger a significant gold price rebound. • Technical levels of importance were broken, such as the $3,200 level and the 61.8% Fibonacci retracement, indicating further potential downside. • Market attention turns to US PPI numbers and Fed Chair Powell’s speech, which may be the next directional driver for XAU/USD. Gold prices are under persistent pressure as overall market sentiment moves out of safe-haven assets. The recent de-escalation of US-China trade tensions has gone a long way in damping investor worries of a global slowdown. A temporary tariff truce for 90 days and encouraging signs from both governments have helped instill confidence again, leading to a shift towards risk assets and away from gold. Meanwhile, more robust-than-anticipated US economic data have prompted traders to temper expectations of aggressive Federal Reserve interest rate cuts, diminishing gold’s attractiveness in the present climate. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView Apart from the better trade prospects, words from a number of Federal Reserve officials indicate a conservative, wait-and-see stance on future rate actions. They recognized advancements in moving inflation towards the 2% level and stressed more data before adjusting policy further. Although geopolitical tensions — such as those in the Middle East and Eastern Europe — are still in focus, they have had modest effects on investors’ behavior recently. All attention is therefore focused on future US economic data and Federal Reserve commentary, which might influence the prospects for both monetary policy and demand for gold in the coming weeks. TECHNICAL ANALYSIS Gold has fallen below important support levels and this signifies a prolongation of the downtrend. The decline below the $3,200 level and the 61.8% Fibonacci retracement of April’s upswing signifies that selling pressure is building. Daily chart oscillators are also becoming negative, supporting the likelihood of continued downside. Intraday support is at the $3,135–$3,133 range, and a clean break below this level would allow access to the $3,100 target and beyond towards $3,060. Upwardly, any rebounding attempts will continue to meet resistance around $3,170, stronger around $3,200 and $3,230, which should limit gains unless sentiment shifts. FORECAST If gold can recapture momentum, a rally may first aim at the $3,170 resistance level, then a possible retest of the $3,200 level. A breakout above this level may set the stage for a further bounce towards $3,230, which is situated at the 50% Fibonacci retracement level. A close above this level may spark renewed buying interest, driving gold towards $3,265 and potentially the $3,300 psychological level. But any positive is likely to be received with suspicion unless dovish Federal Reserve rhetoric is firmly in place or global risk aversion sharply worsens. To the downside, further selling pressure may push gold beneath near-term support at $3,135–$3,133. A firm break here would most probably hasten the fall toward the $3,100 level. If bearish momentum continues, the next significant support is at $3,060, a threshold that may prove to be a firmer bottom unless wider economic or geopolitical factors bring renewed stress. With the existing bearish technical configuration and macroeconomic headwinds in place, risk remains skewed to the downside absent some catalyst over the near term in the form of data or Fed commentary shifting market expectations.

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