Gold price move away from multi-week low; upside seems limited ahead of FOMC meeting

Gold price (XAU/USD) climbs to a fresh daily top during the first half of the European session on Tuesday and moves away from a nearly three-week low, around the $3,300 neighborhood touched the previous day. As investors digest the latest trade optimism, the market anxiety ahead of this week's key central bank events and important US macro data offers some support to the safe-haven precious metal.

Meanwhile, the US Dollar (USD) eases slightly from its highest level since June 23 and turns out to be another factor that benefits the Gold price. However, the growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer should limit any meaningful USD corrective fall. This, in turn, could cap the XAU/USD pair ahead of the crucial FOMC meeting starting later today.

Daily Digest Market Movers: Gold price benefits from reviving safe-haven demand

• A trade agreement between the US and European Union over the weekend added to the optimism led by the US-Japan deal and eased fears about a global trade war. Adding to this, top US and Chinese officials – including US Treasury Chief Scott Bessent and China's Vice Premier He Lifeng –  will resume talks on Tuesday to resolve longstanding economic disputes and extend a truce for three months.
• The US Dollar jumped the most since early May on Monday, putting it on track for a nearly 1.5% rise in July and the first monthly gains this year. This, in turn, dragged the Gold price lower for the fourth consecutive day to its lowest level in three weeks. The USD bulls, however, take a brief pause and opt to wait for more cues about the Federal Reserve's (Fed) rate-cut path before placing fresh bets.
• Hence, the focus will remain glued to the outcome of a two-day FOMC policy meeting, starting this Tuesday. The US central bank is widely expected to leave interest rates unchanged on Wednesday. Hence, the accompanying statement and Fed Chair Jerome Powell's remarks at the post-meeting press conference will be scrutinized closely for fresh insight about the central bank's policy outlook.
• Meanwhile, US President Donald Trump set a new deadline of 10 or 12 days for Russia to make progress towards ending the war in Ukraine. Trump warned of severe sanctions if Russia failed to act and said that his administration would impose 100% secondary tariffs on countries continuing to buy Russian exports. This keeps geopolitical risks in play and supports the safe-haven XAU/USD pair.
• Traders now look forward to Tuesday's US economic docket – featuring the release of JOLTS Job Openings and the Conference Board's Consumer Confidence Index later during the North American session. The data might influence the USD, which, along with trade-related developments and the broader risk sentiment, should provide some impetus to the commodity and produce short-term opportunities.

Gold price is more likely to attract fresh sellers and remain capped near $3,340 hurdle

From a technical perspective, the recent repeated failures near the $3,434-3,435 region constituted the formation of a multiple tops on the daily chart. Moreover, oscillators on the daily chart have just started gaining negative traction and back the case for a further depreciating move for the Gold price. Some follow-through selling below the $3,300 round figure will reaffirm the negative bias and make the XAU/USD pair vulnerable to accelerate the fall towards the $3,260-3,255 horizontal support. The said area coincides with the 100-day Simple Moving Average (SMA) and should act as a key pivotal point, which, if broken decisively, will be seen as a fresh trigger for bearish traders.

On the flip side, any meaningful recovery attempt might now confront an immediate hurdle near the $3,340 area, above which the Gold price could climb to the $3,367-3,368 region. A sustained strength beyond the latter might trigger a short-covering rally and allow the XAU/USD pair to reclaim the $3,400 round figure. The positive momentum could extend further, though it is more likely to remain capped near the $3,434-3,435 strong barrier. A sustained strength above, however, would negate any near-term negative bias and pave the way for a move towards challenging the all-time peak, around the $3,500 psychological mark touched in April.