- Gold is attempting a modest recovery after dipping to a three-week low earlier in the day, supported by a softer US Dollar and easing US Treasury yields.
- Market sentiment improves following a high-level White House summit involving Trump, Zelenskyy, and top EU leaders, boosting diplomatic hopes in the Russia-Ukraine conflict.
- Traders await the FOMC July meeting minutes, which could reveal deeper divisions within the Fed following two dissenting votes for a rate cut.
Gold (XAU/USD) is staging a sharp rebound on Wednesday, trading around $3,340 during the early American session after briefly falling to a three-week low of $3,311 in early Asian trade. The recovery comes as the US Dollar (USD) pulls back from a one-week high, while traders brace for the release of the Federal Reserve’s (Fed) July meeting minutes later in the day.
Gold prices are taking a breather after Tuesday’s sharp decline, as improving risk sentiment eases immediate safe-haven demand. A major meeting at the White House between US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and top European leaders has revived hopes for a diplomatic breakthrough in the Russia-Ukraine conflict. Market attention is now turning toward the possibility of a trilateral summit involving Trump, Russian President Vladimir Putin, and Zelenskyy, which Trump hinted could be in the works.
However, Moscow has not yet committed to such talks. Russian Foreign Minister Sergey Lavrov said any potential meeting would need to be “prepared gradually,” starting at the expert level before progressing through formal diplomatic channels. While no timeline has been established, the renewed engagement has lifted broader risk sentiment. That said, lingering geopolitical uncertainty continues to provide a modest cushion for Gold, as some safe-haven positioning remains in place.
Adding to the cautious tone, traders are also awaiting the release of the FOMC July meeting Minutes, which could shed light on the internal policy debate. The meeting stood out as the first since 1993 to feature two dissenting votes on the Board of Governors, with Christopher Waller and Michelle Bowman advocating for a 25 basis point (bps) rate cut instead of holding rates steady. The minutes may reveal how deep the divisions run within the Fed and whether a shift toward easing is gaining traction, which could significantly influence Gold in the near term. For now, the precious metal remains confined to a narrow range, with technical resistance near $3,330 limiting further upside.
Market movers: Markets cautious ahead of Fed minutes, Trump targets Powell
- The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, climbed to a one-week high of 98.44 earlier in the day but has since edged lower to 98.12, as the Greenback comes under pressure following President Trump’s call for Fed Governor Lisa Cook to resign over a mortgage-related controversy, intensifying political scrutiny on the central bank.
- US Treasury yields ease slightly across the curve for the second straight day, with the benchmark 10-year yield slipping to 4.296% and the 30-year holding near 4.891%. Meanwhile, the 10-year TIPS yield — seen as a proxy for real interest rates — declines by 5 basis points from an intraday high of 1.989% to 1.939%, according to CNBC data. The retreat in real yields offers modest support to Gold by lowering the opportunity cost of holding non-yielding assets.
- On the trade front, the US has expanded its 50% steel and aluminum tariffs to cover an additional 407 product categories, including auto parts, chemicals, plastics, and furniture components. The new measures, which took effect Monday, are designed to close loopholes and curb circumvention tactics. “Today’s action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention, supporting the continued revitalization of the American steel and aluminum industries,” said Jeffrey Kessler, Under Secretary for Industry and Security at the Commerce Department.
- US Treasury Secretary Scott Bessent said in a Fox News interview on Tuesday that Washington has held “very good talks” with China on tariffs, as both sides explore a broader trade agreement during the current 90-day pause in tariff implementation. Bessent noted that “China is right now the biggest revenue line in the tariff income” and signaled more discussions ahead, adding, “I imagine we will be seeing them again before November.” While he said “the status quo is working pretty well,” the comments underline that US-China trade dynamics remain in flux, keeping markets alert to fresh developments.
- On Tuesday, Trump suggested the US might play a role in providing security guarantees, especially through air support. He said, “We’re willing to help them with things, especially, probably you could talk about by air, because there’s nobody that has the kind of stuff we have.” However, he made it clear that the US will not send troops to Ukraine. Trump also pushed for a peaceful resolution, saying, “I hope President Putin is going to be good, and if he’s not, it’s going to be a rough situation.” He added that Ukrainian President Zelenskyy “has to show some flexibility also,” signaling that both sides need to make compromises for a deal to happen.
- President Donald Trump also renewed his attacks on Fed Chair Jerome Powell on Tuesday, accusing him of “hurting the housing industry” by keeping interest rates too high and calling for aggressive rate cuts. The remarks come just days before Powell’s highly anticipated speech at the Jackson Hole Symposium on Friday, where markets will look for clues on the Fed’s next move amid growing political pressure.
Technical analysis: XAU/USD rebounds from three-week low, tests key resistance at $3,330
Gold (XAU/USD) is attempting a mild recovery on Wednesday, hovering near $3,330 after rebounding from a fresh three-week low of $3,311 during early Asian trading. The metal remains under pressure in the short term, though the pace of the decline has slowed as bearish momentum shows signs of exhaustion.
The 4-hour chart reveals that Gold continues to trade within a falling wedge pattern, a structure that typically signals a potential bullish reversal. While Tuesday’s close below the $3,330 horizontal support confirmed a breakdown from the prior range, today’s intraday rebound suggests sellers are losing conviction near the $3,310-$3,300 support.
The Relative Strength Index (RSI) has bounced to 46, showing signs of easing downside momentum, though it remains below the 50-neutral line. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows bearish pressure is fading, with the signal line beginning to flatten, an early sign that downside momentum may be stalling.
That said, immediate resistance is seen near $3,330, which closely aligns with the upper boundary of the falling wedge pattern. A sustained break above this level is needed to ease short-term bearish pressure. Beyond that, the 100-period Simple Moving Average (SMA) near $3,348 remains a firm resistance cap and a key level for bulls to reclaim in order to shift momentum back toward the $3,370 range top.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
