Gold holds near two-week high

On Wednesday, the price of gold dipped to 3,375 USD per troy ounce but remained close to a two-week high, retaining most of its recent gains.

The market remains buoyed by demand for defensive assets amid expectations of a more dovish Federal Reserve policy.

The previous day saw the release of US ISM data, which showed the services sector business activity index for July falling to 50.1 points – below forecasts. The figures indicated sluggish growth, slowing employment, and mounting price pressures. Earlier data also pointed to a weakening labour market and declining consumer spending.

These developments have bolstered expectations that the Fed may cut interest rates as early as September, with markets now pricing in a 90% probability of such a move.

Further support for gold comes from new trade tariffs announced by US President Donald Trump, alongside investor concerns over the Federal Reserve's independence following the resignation of Board of Governors member Lisa Kugler. Her departure paves the way for Trump to appoint a more accommodative successor.

Technical analysis: XAU/USD

Four-hour chart

The XAU/USD pair is forming a broad consolidation range around 3,346 USD on the H4 chart. The market has corrected to 3,390 USD. Today, we assess the likelihood of a new downward wave developing towards 3,333 USD. A break below this level could extend the decline to a minimum of 3,255 USD. This scenario is technically supported by the MACD indicator, where the signal line remains above zero near recent highs but shows signs of an impending downturn.

One-hour chart

On the H1 chart, the market has completed a corrective structure to 3,390 USD. A consolidation range is now forming below this level, with a downward breakout likely to extend the decline towards 3,320 USD. A breach of this support could signal further downside momentum, potentially targeting 3,200 USD. The Stochastic oscillator corroborates this outlook, with its signal line below 50 and trending sharply downward towards 20.

Conclusion

Gold remains resilient near recent highs, supported by macroeconomic uncertainties and shifting Federal Reserve expectations. However, technical indicators suggest potential near-term downside, with key support levels at 3,333 USD (H4) and 3,320 USD (H1) in focus.