Gold (XAU/USD) continues its consolidation phase during Tuesday’s Asian session, trading near the three-week low reached on Monday. The precious metal remains rangebound as markets adopt a cautious stance ahead of the two-day Federal Open Market Committee (FOMC) meeting starting later today. Meanwhile, the US Dollar (USD) has paused its recent rally, offering some support to gold prices, which are holding above the key $3,300 mark.
However, expectations that the Federal Reserve will maintain elevated interest rates for an extended period continue to support the USD, limiting any upside potential for the non-yielding gold. Additionally, recent trade optimism has reduced safe-haven demand, capping gains for the yellow metal. That said, market uncertainty surrounding upcoming central bank decisions and key US macroeconomic data warrants caution among XAU/USD bears.
Market Movers – Daily:
-
Trade Optimism: A trade agreement between the US and European Union over the weekend, coupled with a recent US-Japan deal, has helped ease fears of a global trade conflict. Talks between senior US and Chinese officials, including Treasury Secretary Scott Bessent and Vice Premier He Lifeng, are set to resume today, aiming to resolve long-standing disputes and potentially extend their trade truce for three more months.
-
USD Rally: The US Dollar surged on Monday, posting its largest daily gain since early May and putting it on track for a 1.5% rise in July—its first monthly advance this year. This sharp move weighed on gold prices, which fell for the fourth straight session to a three-week low. However, traders are now awaiting fresh signals from the Fed before making further moves.
-
FOMC Focus: The highlight of the week remains the outcome of the FOMC meeting. While the Fed is widely expected to keep rates unchanged, market participants will closely monitor the policy statement and Fed Chair Jerome Powell’s post-meeting comments for cues on future rate decisions.
-
Geopolitical Tensions: President Donald Trump has issued a new 10- to 12-day deadline for Russia to show progress in ending the war in Ukraine. Failure to comply may trigger harsh sanctions and 100% secondary tariffs on countries continuing to import Russian goods. These developments keep geopolitical tensions elevated, supporting safe-haven flows into gold.
-
Upcoming US Data: Attention also turns to today’s US data releases, including JOLTS Job Openings and the Conference Board’s Consumer Confidence Index. These may influence USD performance and, by extension, gold price direction.
Technical Outlook: Gold Could Fall Sharply Below $3,300
From a technical standpoint, gold has repeatedly failed to breach resistance near the $3,434–$3,435 zone, forming a multiple-top pattern on the daily chart. Daily oscillators are beginning to show bearish momentum, supporting the case for further downside.
A decisive break below the $3,300 level would reinforce the bearish outlook and could trigger a sharper drop toward the $3,260–$3,255 region—aligned with the 100-day Simple Moving Average (SMA). This area is likely to serve as critical support. A sustained move below this zone may open the door to deeper declines.
Upside Scenarios: Key Resistance Levels
On the upside, immediate resistance lies near $3,340. A break above this level could push gold toward the $3,367–$3,368 zone. Continued strength may trigger short covering, allowing the price to retest the $3,400 mark.
However, stronger resistance awaits at the $3,434–$3,435 level. A sustained breakout above this barrier would negate the current bearish bias and could pave the way for a rally toward the all-time high near the $3,500 psychological level reached in April.
