The Fed's dovish stance failed to boost expectations of a rate cut, and gold prices were trapped in a range and recorded their first decline in three weeks
2025-07-18 14:00:17
Gold prices fluctuated weakly in the Asian session, and the market's bullish and bearish divergences intensified.
During the Asian trading session on Friday, the gold price (XAU/USD) remained around 3,330, failing to effectively continue the overnight rebound trend. The overall trend this week was in a consolidation range, and it is currently expected to record the first weekly decline in three weeks.
After Federal Reserve Board Governor Christopher Waller made dovish remarks, the US dollar fell slightly and gold prices benefited briefly, but the room for rebound was obviously limited as the Federal Reserve maintained a high interest rate stance.
Divisions within the Federal Reserve have emerged, and the interest rate outlook is uncertain.
Waller said the economy faces downside risks and supports a rate cut in July; while another Fed official, Kugler, pointed out that current policies remain restrictive and it is necessary to continue to maintain the current interest rate level.
Atlanta Fed President Bostic added that the economic outlook is highly uncertain and it may be difficult to implement interest rate cuts in the short term.
The market currently expects the Fed to cut interest rates by 50 basis points this year, but this has been somewhat reduced compared to the beginning of the year. The federal funds rate is expected to remain unchanged at 4.25%-4.50% at this month's policy meeting, which puts pressure on gold.
Strong U.S. data limited the momentum of gold's rebound.
U.S. retail sales rose 0.6% in June, much better than the previous two consecutive months of negative growth, indicating a rebound in consumer activity; in addition, initial jobless claims fell for the fifth consecutive week to 221,000, a three-month low, indicating that the job market remains robust. These data reinforced the market's expectations that the Fed will remain on hold, which is good for the dollar and curbs the upward trend in gold prices.
Trump's tariff policy has increased safe-haven demand, but has not yet triggered a strong rise in gold prices.
Trump recently announced that he would impose a high tariff of 50% on copper imports and issued a formal notice to 25 countries to implement a new round of 10%-15% import tariffs from August 1, which has revived market concerns about the global economic outlook. Although this move provides safe-haven support for gold, the overall risk appetite environment has not deteriorated significantly, limiting the upside potential of gold.
Judging from the technical chart, since the beginning of July, the gold price has continued to fluctuate between 3,300 and 3,366, forming an obvious rectangular consolidation pattern.
Key resistance above: 3,352 initial resistance, if it breaks through, it may test the pressure near 3370, and further rebound targets are 3,400 and 3,434. Key support below: 3,300 is an important psychological level, if it falls below, it may fall back to the July low of 3250. The current daily indicators are neutral, and there is no obvious deviation, suggesting that there is still a lack of breakthrough momentum in the short term.
Editor's opinion:
The current gold price is in a typical stage of "macro-favorable and technical suppression". Although some Fed officials have released dovish signals, the strong data and the hawkish stance of core members have left expectations of rate cuts uncertain, leading to a lack of confidence among gold bulls.
If Trump further increases tariffs before August, causing risk aversion in the market, gold prices are expected to break out of the consolidation range. But before that, we need to remain cautious and be wary of the risk of false breakthroughs.
During the Asian trading session on Friday, the gold price (XAU/USD) remained around 3,330, failing to effectively continue the overnight rebound trend. The overall trend this week was in a consolidation range, and it is currently expected to record the first weekly decline in three weeks.
After Federal Reserve Board Governor Christopher Waller made dovish remarks, the US dollar fell slightly and gold prices benefited briefly, but the room for rebound was obviously limited as the Federal Reserve maintained a high interest rate stance.
Divisions within the Federal Reserve have emerged, and the interest rate outlook is uncertain.
Waller said the economy faces downside risks and supports a rate cut in July; while another Fed official, Kugler, pointed out that current policies remain restrictive and it is necessary to continue to maintain the current interest rate level.
Atlanta Fed President Bostic added that the economic outlook is highly uncertain and it may be difficult to implement interest rate cuts in the short term.
The market currently expects the Fed to cut interest rates by 50 basis points this year, but this has been somewhat reduced compared to the beginning of the year. The federal funds rate is expected to remain unchanged at 4.25%-4.50% at this month's policy meeting, which puts pressure on gold.
Strong U.S. data limited the momentum of gold's rebound.
U.S. retail sales rose 0.6% in June, much better than the previous two consecutive months of negative growth, indicating a rebound in consumer activity; in addition, initial jobless claims fell for the fifth consecutive week to 221,000, a three-month low, indicating that the job market remains robust. These data reinforced the market's expectations that the Fed will remain on hold, which is good for the dollar and curbs the upward trend in gold prices.
Trump's tariff policy has increased safe-haven demand, but has not yet triggered a strong rise in gold prices.
Trump recently announced that he would impose a high tariff of 50% on copper imports and issued a formal notice to 25 countries to implement a new round of 10%-15% import tariffs from August 1, which has revived market concerns about the global economic outlook. Although this move provides safe-haven support for gold, the overall risk appetite environment has not deteriorated significantly, limiting the upside potential of gold.
Judging from the technical chart, since the beginning of July, the gold price has continued to fluctuate between 3,300 and 3,366, forming an obvious rectangular consolidation pattern.
Key resistance above: 3,352 initial resistance, if it breaks through, it may test the pressure near 3370, and further rebound targets are 3,400 and 3,434. Key support below: 3,300 is an important psychological level, if it falls below, it may fall back to the July low of 3250. The current daily indicators are neutral, and there is no obvious deviation, suggesting that there is still a lack of breakthrough momentum in the short term.
Editor's opinion:
The current gold price is in a typical stage of "macro-favorable and technical suppression". Although some Fed officials have released dovish signals, the strong data and the hawkish stance of core members have left expectations of rate cuts uncertain, leading to a lack of confidence among gold bulls.
If Trump further increases tariffs before August, causing risk aversion in the market, gold prices are expected to break out of the consolidation range. But before that, we need to remain cautious and be wary of the risk of false breakthroughs.
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