Gold (XAU/USD) remains under pressure on Monday, trading in a narrow range below $3,350 as stronger US Treasury yields and renewed global risk appetite weigh on the safe-haven metal. The positive sentiment follows the announcement of a trade agreement between the United States and the European Union, reducing the demand for non-yielding assets like gold.
XAU/USD Technical Analysis: Bearish Bias Still Intact
Gold is currently hovering near $3,316 after falling below a key ascending trendline and the 50% Fibonacci retracement of the recent rally from the June low. This breakdown triggered fresh bearish sentiment, though the metal has shown some resilience at the 61.8% retracement zone around $3,312.
Momentum indicators on the daily chart have turned bearish, suggesting further downside may be in store. A confirmed break below $3,311 could expose the $3,300 psychological level and potentially the monthly low near $3,283.
On the upside, immediate resistance lies around the $3,351–$3,352 area, marked by the 200-period SMA on the 4-hour chart. A clear breakout above this could trigger short-covering and push XAU/USD toward the $3,371–$3,373 zone. Sustained buying may even open the door to a retest of the $3,400 handle and the longer-term ceiling at $3,438–$3,440.
Fundamental Outlook: Focus Shifts to Fed and US Economic Data
Gold’s muted performance also stems from traders awaiting clarity on the Federal Reserve’s next policy steps. The Fed begins its two-day meeting on Tuesday, with the rate decision and press conference scheduled for Wednesday. While no change in interest rates is expected, market participants will closely watch Chairman Powell’s comments for signs of a potential rate cut in September.
Political pressure on the Fed is also in the spotlight, with President Trump renewing criticism of Fed Chair Jerome Powell. Notably, Fed officials such as Christopher Waller and Michelle Bowman have recently supported easing, adding uncertainty to the central bank’s outlook.
Beyond the Fed, this week’s key US economic releases—such as PCE inflation, GDP, and jobless claims—could influence both the dollar and gold. A stronger-than-expected print could keep the dollar firm, limiting gold’s upside.
Meanwhile, improving global sentiment—thanks to US trade deals with the EU, Japan, and possibly China—has dampened safe-haven flows into gold. Reduced geopolitical and economic uncertainty continues to favor riskier assets, adding to the headwinds for bullion.
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