GOLD down but not out as Fed and tariff concerns linger
Gold renews two-week highs just shy of $3,400, then retreats early Wednesday.
US Dollar sees an uptick, but any upside appears limited amid Fed and tariff concerns.
Technically, the $3,400 resistance area acts as a tough nut to crack for buyers; RSI stays bullish.
Gold is pulling back from the $3,400 neighbourhood, having refreshed two-week highs early Wednesday. Concerns over the US Fed autonomy and latest US tariff threats could cushion any downside in Gold.
The ongoing feud between US President Donald Trump and the Fed is expected to act as a headwind for the renewed USD upside in the upcoming sessions.
On Tuesday, Trump announced that he plans to fire Fed Governor Lisa Cook over her false statements on mortgage applications. However, Cook stood her ground and said that Trump had no authority to remove her.Late Tuesday, Bloomberg reported that Trump said he was ready for a legal fight with Cook.
Following these developments, markets remain wary of Trump’s constant attacks on the Fed’s independence.This, combined with the increased odds of a September Fed interest rate cut contributes to the limited upside potential in the Greenback.
Therefore, the pullback in Gold will likely be bought into at lower levels as investors hunt for bargain bets.
Further, Gold could also draw some support from intensifying concerns over US President Trump’s latest tariff threats on China and the 50% levies to be effective on India from Wednesday.
Tariff threats revive economic growth concerns, undermining the attractiveness of US assets, including the US Dollar. As a result, Gold tends to benefit amid a weaker USD and also a safe-haven asset.
However, if the Greenback defies the bearish fundamentals and extends its rebound on intense risk aversion or profit-taking, Gold’s move higher will be in check.
Attention turns to Friday’s US core PCE Price Index for fresh cues on the Fed’s interest rate outlook, which could provide a firm directional impetus to Gold.
Daily technical analysis
Nothing seems to have changed for Gold, technically in the short-term, as the bullish potential remains intact so long as the 14-day RSI stays above the 50 level. The leading indicator is currently edging lower to near 55.50.
Buyers also stay hopeful amid a Bull Cross, with the 21-day SMA having closed above the 50-day SMA on Monday.The immediate topside hurdle is seen in the $3,400 area, above which the static resistance at around $3,440 will be back in play.
Alternatively, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,350 to regain control on a sustained basis.
The next solid support is located at the 100-day SMA at $3,328. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
GOLD down but not out as Fed and tariff concerns linger
Gold is pulling back from the $3,400 neighbourhood, having refreshed two-week highs early Wednesday. Concerns over the US Fed autonomy and latest US tariff threats could cushion any downside in Gold.
The ongoing feud between US President Donald Trump and the Fed is expected to act as a headwind for the renewed USD upside in the upcoming sessions.
On Tuesday, Trump announced that he plans to fire Fed Governor Lisa Cook over her false statements on mortgage applications. However, Cook stood her ground and said that Trump had no authority to remove her.Late Tuesday, Bloomberg reported that Trump said he was ready for a legal fight with Cook.
Following these developments, markets remain wary of Trump’s constant attacks on the Fed’s independence.This, combined with the increased odds of a September Fed interest rate cut contributes to the limited upside potential in the Greenback.
Therefore, the pullback in Gold will likely be bought into at lower levels as investors hunt for bargain bets.
Further, Gold could also draw some support from intensifying concerns over US President Trump’s latest tariff threats on China and the 50% levies to be effective on India from Wednesday.
Tariff threats revive economic growth concerns, undermining the attractiveness of US assets, including the US Dollar. As a result, Gold tends to benefit amid a weaker USD and also a safe-haven asset.
However, if the Greenback defies the bearish fundamentals and extends its rebound on intense risk aversion or profit-taking, Gold’s move higher will be in check.
Attention turns to Friday’s US core PCE Price Index for fresh cues on the Fed’s interest rate outlook, which could provide a firm directional impetus to Gold.
Daily technical analysis
Nothing seems to have changed for Gold, technically in the short-term, as the bullish potential remains intact so long as the 14-day RSI stays above the 50 level. The leading indicator is currently edging lower to near 55.50.
Buyers also stay hopeful amid a Bull Cross, with the 21-day SMA having closed above the 50-day SMA on Monday.The immediate topside hurdle is seen in the $3,400 area, above which the static resistance at around $3,440 will be back in play.
Alternatively, sellers need to crack the 21-day SMA and the 50-day SMA confluence area near $3,350 to regain control on a sustained basis.
The next solid support is located at the 100-day SMA at $3,328. Only a sustained move below the latter will negate any positive bias in the medium term.
Note that Gold hasn’t closed below the 100-day SMA since December 31 2024.
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