Gold Price Forecast: XAU/USD remains poised to test stiff resistance at $3,400
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UPGRADE- Gold pops as concerns over the Fed’s independence resurface after Trump fired Governor Cook.
- US Dollar attempts a tepid recovery, tracking US Treasury yields rebound but sellers will likely retain control.
- Technically, Gold stays supported whilst above $3,350 amid daily bullish RSI.
Gold finds renewed demand and eyes $3,400 early Tuesday, following a brief pullback stint on Monday. Buyers gather pace near 11-day highs above $3,380 before the next push higher.
Gold: More upside appears on the cards
The latest upswing in Gold from near $3,350 area toward $3,400 could be mainly attributed broad sell-off in the US Dollar (USD) and shorter-duration US Treasury bond yields as resurfacing concerns over the United States (US) Federal Reserve’s (Fed) independence and credibility undermined confidence in US assets.
US President Donald Trump said on social media early Tuesday that he was removing Lisa Cook from her position on the Fed's board of directors, noting that “there was enough evidence that Cook had made false statements on mortgage applications,” per Reuters.
Following these headlines, risk aversion gripped markets and investors ran for cover in safe-haven assets such as the Japanese Yen (JPY), Gold, US Treasuries etc.
The Greenback gave back the previous recovery gains, further undermined by increased bets that the Fed will deliver a 25 basis points (bps) interest rate cut next month.
These expectations were fuelled by Fed Chair Jerome Powell’s surprise dovish pivot at the Jackson Hole Economic Symposium last week.
However, over the last hours, the USD has embarked on a tepid rebound as Trump’s fresh tariff threats revive its appeal as a safe haven.
US president threatened to impose 200% tariffs on targeted goods if China doesn't "give us magnets".
He also threatened "subsequent additional tariffs" and export restrictions on advanced technology and semiconductors in retaliation for digital services taxes that hit American technology companies.
Later in the day, a bunch of mid-tier economic data releases from the US will be closely scrutinized for fresh hints on the Fed’s path forward on rates beyond the September policy meeting.
Additionally, Trump’s tariff tantrums and attacks on the Fed will also remain a key driving force behind the performance of Gold and the US currency.
Gold price technical analysis: Daily chart
The short-term technical outlook for Gold looks constructive so long as the 14-day Relative Strength Index (RSI) stays above the 50 level. The leading indicator is currently pointing north to near 54.50.
Buyers are likely to extend their control as the 21-day Simple Moving Average (SMA) closed above the 50-day SMA on Monday, validating a Bull Cross.
The immediate resistance is seen in the $3,400 neighborhood, above which the static resistance at around $3,440 will be back in play.
On the other hand, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,350 to regain control.
The next solid support is located at the 100-day SMA at $3,324. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
- Gold pops as concerns over the Fed’s independence resurface after Trump fired Governor Cook.
- US Dollar attempts a tepid recovery, tracking US Treasury yields rebound but sellers will likely retain control.
- Technically, Gold stays supported whilst above $3,350 amid daily bullish RSI.
Gold finds renewed demand and eyes $3,400 early Tuesday, following a brief pullback stint on Monday. Buyers gather pace near 11-day highs above $3,380 before the next push higher.
Gold: More upside appears on the cards
The latest upswing in Gold from near $3,350 area toward $3,400 could be mainly attributed broad sell-off in the US Dollar (USD) and shorter-duration US Treasury bond yields as resurfacing concerns over the United States (US) Federal Reserve’s (Fed) independence and credibility undermined confidence in US assets.
US President Donald Trump said on social media early Tuesday that he was removing Lisa Cook from her position on the Fed's board of directors, noting that “there was enough evidence that Cook had made false statements on mortgage applications,” per Reuters.
Following these headlines, risk aversion gripped markets and investors ran for cover in safe-haven assets such as the Japanese Yen (JPY), Gold, US Treasuries etc.
The Greenback gave back the previous recovery gains, further undermined by increased bets that the Fed will deliver a 25 basis points (bps) interest rate cut next month.
These expectations were fuelled by Fed Chair Jerome Powell’s surprise dovish pivot at the Jackson Hole Economic Symposium last week.
However, over the last hours, the USD has embarked on a tepid rebound as Trump’s fresh tariff threats revive its appeal as a safe haven.
US president threatened to impose 200% tariffs on targeted goods if China doesn't "give us magnets".
He also threatened "subsequent additional tariffs" and export restrictions on advanced technology and semiconductors in retaliation for digital services taxes that hit American technology companies.
Later in the day, a bunch of mid-tier economic data releases from the US will be closely scrutinized for fresh hints on the Fed’s path forward on rates beyond the September policy meeting.
Additionally, Trump’s tariff tantrums and attacks on the Fed will also remain a key driving force behind the performance of Gold and the US currency.
Gold price technical analysis: Daily chart
The short-term technical outlook for Gold looks constructive so long as the 14-day Relative Strength Index (RSI) stays above the 50 level. The leading indicator is currently pointing north to near 54.50.
Buyers are likely to extend their control as the 21-day Simple Moving Average (SMA) closed above the 50-day SMA on Monday, validating a Bull Cross.
The immediate resistance is seen in the $3,400 neighborhood, above which the static resistance at around $3,440 will be back in play.
On the other hand, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,350 to regain control.
The next solid support is located at the 100-day SMA at $3,324. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
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