Gold price (XAU/USD) continues to trade in a narrow range near the $2,500 level as traders await more cues regarding the Federal Reserve’s rate-cut path. The focus is on the release of the July FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday. A modest US Dollar recovery and positive risk tone are acting as headwinds for the Gold price, along with expectations of an imminent start of the Fed’s rate-cutting cycle in September. Despite this, geopolitical tensions and the risk of escalation in the Middle East continue to lend support to the safe-haven metal.
Traders are cautious ahead of the key event risk and are waiting for more clarity from the Fed before positioning for the next leg of a directional move. The upcoming FOMC meeting minutes and Powell’s speech will be closely watched for hints about a possible larger rate cut in September. Market participants have scaled back their bets for a more aggressive policy easing by the Fed following an upbeat Retail Sales report for July. The CME Group’s FedWatch Tool indicates a greater chance that the Fed will begin its policy easing cycle in September and lower borrowing costs by over 200 basis points by the end of 2025.
Technical analysis suggests that the Gold price setup remains tilted in favor of bulls, with a move beyond the $2,509-2,510 area or the all-time peak awaited. The range-bound price action is seen as a bullish consolidation phase, supported by positive oscillator readings on the daily chart. Upside momentum could be limited near the $2,472-2,470 level, with key support near the $2,448-2,446 region. A break below this support could lead to deeper losses towards the 50-day Simple Moving Average support near $2,392.
On the geopolitical front, negotiations are expected to resume this week between Israel and Hamas, fueling optimism for a ceasefire in the Middle East and reducing tensions. This could boost investors’ appetite for riskier assets and have an impact on the Gold price. Overall, the Gold price outlook remains uncertain as traders await more clarity on the Fed’s rate-cut path and monitor geopolitical developments that could influence market sentiment. The July FOMC meeting minutes and Powell’s speech will be key events to watch in the coming days.
In conclusion, the Gold price remains in a tight range near the record peak as traders weigh economic indicators and geopolitical developments. The upcoming FOMC meeting minutes and Powell’s speech will provide more insights into the Fed’s rate-cutting path. Technical analysis points to a bullish consolidation phase for the Gold price, with key support and resistance levels to watch. Geopolitical tensions in the Middle East could also impact market sentiment and the Gold price outlook. Overall, caution is advised for traders as they navigate uncertain market conditions and await more cues from the Fed and global events.
