Expectations of a Fed rate cut support gold prices, which hold key support levels. Inflation data may be key to a breakthrough.
2025-08-12 13:35:35
Gold prices stabilized and rebounded in Asian trading on Tuesday, after plunging about 1.65% on Monday to a one-week low of $3,341 due to easing geopolitical risks and continued buying of the US dollar.
The market generally expects the Federal Reserve to cut interest rates by 25 basis points in September and implement at least two more rate cuts before the end of the year. The recent weak U.S. non-farm payroll data has further reinforced expectations of easing, which has limited further upside of the U.S. dollar and provided support for gold.
A resurgence in risk appetite has weakened safe-haven demand. The US President signed an executive order extending the tariff suspension with Asian giants for three months and stated on social media that gold is not subject to tariffs. Meanwhile, the market has high hopes for this Friday's US-Russia meeting, believing it could help de-escalate the Russia-Ukraine conflict, which has put pressure on traditional safe-haven assets.
In the short term, traders generally remain on the sidelines before the release of the US CPI. This data will directly affect the Fed's policy expectations, thereby dominating the short-term direction of the US dollar and gold.
This week will also see the release of U.S. PPI, retail sales and Michigan consumer confidence index, as well as speeches by several Federal Reserve officials, all of which may bring additional volatility to gold prices.
The 4-hour chart shows that gold prices are holding above the 200-period moving average ($3,340), which is an important support level for bulls and bears. If it falls below this area, it may trigger technical selling and push the price towards $3,315 or even $3,300.
On the other hand, if it stands above $3360, it will face resistance at $3380. If it breaks through $3400 and rises to last week's high of $3410, it will reverse the short-term bearish structure, with further targets at $3423 or even the strong resistance zone of $3445. If it breaks through again, it is expected to hit the historical high of $3500.
Editor's opinion:
Gold prices are currently being driven by both macroeconomic news and technical support. $3,342 is the short-term dividing line between bulls and bears, while $3,400 is a crucial hurdle for a bullish reversal. If US inflation data falls short of expectations, gold could seize the opportunity to break through; however, if the data is strong, gold prices could lose support and accelerate their decline. The direction of fluctuations upon the CPI release is crucial.
The market generally expects the Federal Reserve to cut interest rates by 25 basis points in September and implement at least two more rate cuts before the end of the year. The recent weak U.S. non-farm payroll data has further reinforced expectations of easing, which has limited further upside of the U.S. dollar and provided support for gold.
A resurgence in risk appetite has weakened safe-haven demand. The US President signed an executive order extending the tariff suspension with Asian giants for three months and stated on social media that gold is not subject to tariffs. Meanwhile, the market has high hopes for this Friday's US-Russia meeting, believing it could help de-escalate the Russia-Ukraine conflict, which has put pressure on traditional safe-haven assets.
In the short term, traders generally remain on the sidelines before the release of the US CPI. This data will directly affect the Fed's policy expectations, thereby dominating the short-term direction of the US dollar and gold.
This week will also see the release of U.S. PPI, retail sales and Michigan consumer confidence index, as well as speeches by several Federal Reserve officials, all of which may bring additional volatility to gold prices.
The 4-hour chart shows that gold prices are holding above the 200-period moving average ($3,340), which is an important support level for bulls and bears. If it falls below this area, it may trigger technical selling and push the price towards $3,315 or even $3,300.
On the other hand, if it stands above $3360, it will face resistance at $3380. If it breaks through $3400 and rises to last week's high of $3410, it will reverse the short-term bearish structure, with further targets at $3423 or even the strong resistance zone of $3445. If it breaks through again, it is expected to hit the historical high of $3500.
Editor's opinion:
Gold prices are currently being driven by both macroeconomic news and technical support. $3,342 is the short-term dividing line between bulls and bears, while $3,400 is a crucial hurdle for a bullish reversal. If US inflation data falls short of expectations, gold could seize the opportunity to break through; however, if the data is strong, gold prices could lose support and accelerate their decline. The direction of fluctuations upon the CPI release is crucial.
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