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Gold stands firm near all-time peak amid Fed rate cut bets, trade woes

  • Gold advances to a fresh record high on Wednesday amid a supportive fundamental backdrop.
  • Fed rate cut bets, US tariffs uncertainty, and a weaker risk tone underpin the XAU/USD pair.
  • Bulls seem reluctant amid the overbought daily RSI  and opt to wait for the US NFP report.

Gold (XAU/USD) extends its sideways consolidative price action through the first half of the European session on Wednesday and remains close to the all-time peak. The growing acceptance that the US Federal Reserve (Fed) will cut interest rates this month keeps a lid on the US Dollar (USD) recovery move and continues to act as a tailwind for the non-yielding yellow metal. Apart from this, persistent trade-related uncertainties benefit the precious metal's safe-haven status and help limit the downside.

The upside, however, remained capped as bulls now seem reluctant to place fresh bets amid extremely overbought conditions. Furthermore, traders opt to move to the sidelines ahead of the release of the US Nonfarm Payrolls (NFP) report on Friday for more cues about the Fed's rate-cut path. This will influence the near-term USD price dynamics and determine the next leg of a directional move for the Gold price. In the meantime, the JOLTS Job Openings might provide some impetus to the XAU/USD.

Daily Digest Market Movers: Gold consolidates the recent run up to record high

  • According to the CME Group's FedWatch Tool, traders are pricing in an over 90% chance that the US Federal Reserve will lower borrowing costs by 25-basis-point at the end of the two-day policy meeting on September 17. Furthermore, market participants expect the central bank to deliver at least two rate cuts by the end of this year, which continues to boost the non-yielding Gold.
  • Meanwhile, US President Donald Trump has been exerting pressure on the Fed Chair Jerome Powell to cut interest rates. Apart from this, Trump's move to oust Fed Governor Lisa Cook amid alleged mortgage fraud raised concerns about the central bank's ability to function without political interference. This, along with trade uncertainties, lifts the XAU/USD to a fresh record high.
  • Trump on Tuesday said his administration will ask the Supreme Court for an expedited ruling on tariffs that a US appeals court found illegal last week. This adds another layer of uncertainty in the markets as the Supreme Court decision could radically change the macro landscape, which, in turn, is seen as another factor that offers additional support to the safe-haven precious metal.
  • Rising fiscal deficits, persistent inflation, and eroding central bank credibility continue to push global bond yields higher, fueling anxiety about government finances. This led to the overnight slump in the British Pound and the Japanese Yen, which assists the US Dollar to preserve its recovery gains and holds back the XAU/USD bulls from placing fresh bets amid overbought conditions.
  • Traders now look forward to the release of the US JOLTS Job Openings for short-term opportunities later today. This week's US economic docket also highlights the ADP report on private-sector employment and ISM Services PMI on Thursday. The focus, however, will remain glued to the closely-watched US Nonfarm Payrolls report on Friday, which should provide a fresh impetus to the XAU/USD pair.

Gold bulls have the upper hand; dip-buying should help limit any deeper corrective pullback

From a technical perspective, the overnight momentum beyond the $3,500 psychological mark validated last week's breakout through a three-month-old trading range and backs the case for additional gains. That said, the daily Relative Strength Index (RSI) is flashing overbought conditions and makes it prudent to wait for some consolidation or a modest pullback before the next leg up.

In the meantime, any corrective slide might now find decent support near the $3,500 mark. A further decline is more likely to attract fresh buyers and remain limited near the $3,440 strong horizontal resistance breakpoint. The latter should act as a near-term base for the Gold price, which, if broken, might prompt some technical selling and pave the way for a fall towards the $3,400 round figure.

On the flip side, the Asian session high, around the $3,546-3,547 region, could act as an immediate hurdle. Nevertheless, the Gold price could extend the upward move in uncharted territory and aim towards conquering the $3,600 mark, which is the trading range breakout target.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

Read more.

Next release: Wed Sep 03, 2025 14:00

Frequency: Monthly

Consensus: 7.4M

Previous: 7.437M

Source: US Bureau of Labor Statistics

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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