Gold recovers from recent sell-off, focus turns to Fed and US-China talks

Gold (XAU/USD) prices are struggling to recover after recent sharp selling pressure. The metal has dropped toward a key support zone near $3,250, with market sentiment remaining cautious. Buyers are now attempting to defend this level. Optimism around potential Fed rate cuts and easing inflation is offering some support. However, geopolitical tensions and US economic data continue to influence price action. Traders remain focused on upcoming Fed commentary, as a clear breakout or breakdown will likely determine gold’s next directional move.

Gold finds buying interest near $3,250 support as buyers step in

Gold has faced consistent downward pressure in recent days, with a sharp decline pushing the yellow metal toward a key support zone between $3,250 and $3,240. Price action indicates that buyers are stepping in to defend this area. While the broader market mood remains cautious, there is a hint of optimism.

US economic data released on Friday fueled hopes for Fed rate cuts. Personal spending unexpectedly fell by 0.1% in May, marking the second decline this year. Personal income also dropped by 0.4%, the largest decline since September 2021. Inflation data was mixed but remained within expectations, with the PCE Price Index rising 2.3% year-over-year and the Core PCE increasing by 2.7%.

Geopolitical developments also remain in focus. Tensions between Israel and Iran have eased following a ceasefire agreement. Additionally, progress in U.S.-China trade talks has lifted investor sentiment. Optimism surrounding potential trade agreements with major U.S. partners could further support risk appetite.

Gold finds buying interest near $3,250 support as buyers step in

The gold chart below shows a clear technical structure on the 4-hour timeframe, highlighting key levels and trend patterns. After a steady decline from the $3,400 area, the price found support near $3,250. This level aligns with a previous demand zone from late May, marked by the beige rectangle on the chart.

A bullish reaction from this zone is visible as buyers stepped in to defend the support. The price briefly dipped below $3,260 but quickly recovered, indicating buying interest. The current price is approximately $3,274, marking a short-term rebound that may be underway.

However, the overall trend remains bearish unless Gold breaks above key resistance levels. Immediate resistance lies near $3,300, followed by stronger resistance around $3,340 to $3,360. A sustained move above these levels could signal a trend reversal.

Conclusion

Gold prices are showing early signs of recovery as buyers defend key support levels. Rising bets on Fed rate cuts and a softer US Dollar could further support the metal. However, easing geopolitical tensions may cap gains. Traders should monitor resistance levels and upcoming Federal Reserve speeches for clearer direction. The broader trend stays cautious but slightly optimistic. A break above $3,300 could trigger fresh upside momentum. Failure to hold $3,250 may expose Gold to further losses.