The market wait-and-see sentiment heats up before the Fed's decision, and the gold price hovers near the $3,300 mark, waiting for a direction to be chosen
2025-07-29 13:26:23
Gold prices continued their sluggish trend as the market awaited clarity on Federal Reserve policy. Following Monday's sharp drop, gold prices (XAU/USD) remained under pressure during Tuesday's Asian trading session, hovering around $3,300 and struggling to attract meaningful buying.
The trade agreement between the United States and the European Union, the continued strength of the US dollar and the expectation that the Federal Reserve will maintain high interest rates have created multiple negative pressures on gold prices.
According to market research, the U.S. dollar index is expected to record a 1.5% increase in July, marking the first monthly increase this year. This momentum also suppressed the precious metals market.
The market is focused on this week's FOMC policy meeting and economic data. Although the market generally expects the Federal Reserve to keep interest rates unchanged at 4.25%-4.50%, investors will closely monitor Wednesday's FOMC statement and Chairman Powell's remarks for clues on whether there will be a rate cut in September.
This week, the United States will also release the second quarter core PCE inflation data and the July non-farm payrolls report, which will have potential impacts on both the dollar and gold prices.
Well-known metals analyst and TD Securities strategist pointed out: "If the Fed continues to rule out the possibility of a rate cut in the short term in its statement, gold will come under further pressure and the key support level will be tested near the 100-day moving average."
Trump's increased pressure on Russia has heightened geopolitical risks. He announced a 10-12-day ceasefire in the Russia-Ukraine conflict and threatened to impose 100% "secondary sanctions" tariffs on countries that continue to import Russian goods. This move has provided some support for safe-haven gold, but it is currently struggling to compete with the strong momentum of the US dollar.
The daily gold chart shows that since the price repeatedly encountered resistance in the $3,434 area, a clear "multiple top" pattern has formed, suggesting a solid resistance zone above. The current price is holding near the psychological level of $3,300. A break below this level would confirm the continuation of the bearish trend, with the target below being the 100-day moving average intersection of $3,260-3,255.
If this support area is breached, it may trigger further downside to around $3,200.
On the other hand, if there is a short-term rebound, initial resistance is located at $3,340, with further resistance at $3,370. If gold prices break through and hold $3,400, it could trigger a short-covering rally, challenging $3,434. A successful break above this key level would open the door to the all-time high of $3,500.
However, in the absence of any signal of a policy shift by the Federal Reserve, the upside remains limited.
Editor's opinion:
Gold prices are currently entering a critical period of transition, with a strong dollar and expectations of higher interest rates continuing to weigh on prices, while geopolitical risks and risk aversion are providing some support. Given the intertwined negative fundamentals and technical breakdown risks, the performance of the $3,300 support level should be closely monitored.
If the FOMC meeting does not release any dovish signals, gold may enter a new round of technical decline channel, waiting for policies and data to further clarify the direction.
The trade agreement between the United States and the European Union, the continued strength of the US dollar and the expectation that the Federal Reserve will maintain high interest rates have created multiple negative pressures on gold prices.
According to market research, the U.S. dollar index is expected to record a 1.5% increase in July, marking the first monthly increase this year. This momentum also suppressed the precious metals market.
The market is focused on this week's FOMC policy meeting and economic data. Although the market generally expects the Federal Reserve to keep interest rates unchanged at 4.25%-4.50%, investors will closely monitor Wednesday's FOMC statement and Chairman Powell's remarks for clues on whether there will be a rate cut in September.
This week, the United States will also release the second quarter core PCE inflation data and the July non-farm payrolls report, which will have potential impacts on both the dollar and gold prices.
Well-known metals analyst and TD Securities strategist pointed out: "If the Fed continues to rule out the possibility of a rate cut in the short term in its statement, gold will come under further pressure and the key support level will be tested near the 100-day moving average."
Trump's increased pressure on Russia has heightened geopolitical risks. He announced a 10-12-day ceasefire in the Russia-Ukraine conflict and threatened to impose 100% "secondary sanctions" tariffs on countries that continue to import Russian goods. This move has provided some support for safe-haven gold, but it is currently struggling to compete with the strong momentum of the US dollar.
The daily gold chart shows that since the price repeatedly encountered resistance in the $3,434 area, a clear "multiple top" pattern has formed, suggesting a solid resistance zone above. The current price is holding near the psychological level of $3,300. A break below this level would confirm the continuation of the bearish trend, with the target below being the 100-day moving average intersection of $3,260-3,255.
If this support area is breached, it may trigger further downside to around $3,200.
On the other hand, if there is a short-term rebound, initial resistance is located at $3,340, with further resistance at $3,370. If gold prices break through and hold $3,400, it could trigger a short-covering rally, challenging $3,434. A successful break above this key level would open the door to the all-time high of $3,500.
However, in the absence of any signal of a policy shift by the Federal Reserve, the upside remains limited.
Editor's opinion:
Gold prices are currently entering a critical period of transition, with a strong dollar and expectations of higher interest rates continuing to weigh on prices, while geopolitical risks and risk aversion are providing some support. Given the intertwined negative fundamentals and technical breakdown risks, the performance of the $3,300 support level should be closely monitored.
If the FOMC meeting does not release any dovish signals, gold may enter a new round of technical decline channel, waiting for policies and data to further clarify the direction.
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