Gold Price Hovers Below Multi-Week High Amid Fed Bets and Geopolitical Uncertainty

Gold (XAU/USD) dipped slightly on Thursday after briefly testing the $3,384 mark in the Asian session, as a minor rebound in the US Dollar capped gains. Despite this, the precious metal remains underpinned by bullish fundamentals, including rising expectations of Federal Reserve rate cuts, heightened geopolitical tensions, and US fiscal uncertainty.

Gold Struggles for Momentum Ahead of Key Trump-Xi Call and NFP Report

After gaining modestly earlier in the week, gold prices now face consolidation as traders await two major events: the high-stakes call between US President Donald Trump and Chinese President Xi Jinping, and Friday’s US Nonfarm Payrolls (NFP) data. The cautious sentiment has kept investors from making aggressive moves.

A weaker-than-expected ADP jobs report, showing just 37,000 new private-sector jobs in May, and a sharp drop in ISM Services PMI to 49.9, signaled potential cracks in the US economy. These soft readings have reinforced market bets on a Fed rate cut as early as September, keeping Treasury yields low and providing a cushion for gold bulls.

Key Fundamentals Supporting Gold

• Dovish Fed expectations: Treasury yields remain under pressure as markets price in at least one rate cut this year.
• US fiscal risks: President Trump’s proposed tax-and-spend package raises fears of an expanding deficit.
• Trade war jitters: New tariffs on steel and aluminum imports revive US-China trade tensions.
• Geopolitical flashpoints: Rising violence in Gaza and Russia-Ukraine conflict adds a safe-haven bid to gold.

Despite these tailwinds, a modest USD bounce has limited upside in the near term.

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Gold Technical Outlook: Bulls Eye Break Above $3,385

Gold remains technically bullish following a breakout above the $3,324–$3,326 resistance earlier this week. Momentum indicators on both daily and hourly charts suggest strength, but traders await a decisive close above $3,385 to confirm the next leg higher.

• Upside Targets: $3,400 followed by $3,433–$3,435, and potentially $3,500 (April’s all-time high).
• Support Levels: Immediate support is seen at $3,355. Further downside could attract dip buyers near $3,326, with a deeper correction testing $3,285.

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Bottom Line

Gold prices are consolidating just below key resistance as traders weigh softer US data, potential Fed easing, and mounting geopolitical risks. A clear breakout above $3,385 could reignite bullish momentum, while Friday’s US NFP report may set the tone for the next major move in XAU/USD.

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