Gold Price Forecast: XAU/USD Rises as Dollar Weakens Amid Fed Independence Concerns

Key Highlights:

• Gold price extends gains amid continued weakness in the US Dollar.
• Fears over Fed independence and rate cut expectations fuel support for bullion.
• Ceasefire optimism in the Middle East limits safe-haven demand.
• Eyes now on upcoming US PCE inflation data and Fed commentary.

Gold Price Today – June 27, 2025

The price of gold (XAU/USD) edged higher for a second straight session on Thursday, supported by sustained selling pressure on the US Dollar, which has dropped to its lowest levels since March 2022. As of the Asian session, gold is trading just above $3,300, buoyed by increased expectations of US Federal Reserve rate cuts later this year and rising concern over political interference in central bank policy.

What’s Driving the Market?

🔻 USD Hits Multi-Year Low
The US Dollar Index (DXY) weakened further after US President Donald Trump intensified his criticism of Fed Chair Jerome Powell, hinting at possible replacements. These developments have rattled market confidence in the Fed’s independence, fueling concerns over future monetary policy credibility.

📉 Fed Rate Cut Bets Strengthen
Markets now anticipate at least 50 basis points of rate cuts by year-end. Powell, in his latest testimony, signaled patience on rate moves but acknowledged that new tariffs could elevate inflation later this summer.

🕊️ Middle East Ceasefire Limits Upside
While the Israel-Iran ceasefire continues to hold, the easing of geopolitical tensions has reduced demand for traditional safe-haven assets like gold. That said, uncertainty over the truce’s durability keeps traders cautious.

📊 Key Data in Focus
All eyes are on Thursday’s US economic releases including GDP revisions, jobless claims, and durable goods orders. More critically, Friday’s release of the US Core PCE Price Index—the Fed’s preferred inflation gauge—could provide decisive direction for both the USD and gold prices.

Gold Technical Outlook – XAU/USD Levels to Watch

📉 Support Levels:

• $3,300 – Key psychological support
• $3,245 – Initial downside target
• $3,210 – Strong horizontal support
• $3,175 – Bearish extension level

📈 Resistance Levels:

• $3,368 – Trendline resistance (previous support)
• $3,400 – Round number resistance
• $3,434 – Intermediate resistance
• $3,452 – Near 2-month high
• $3,500 – All-time high resistance

The recent breakdown below the ascending channel raised bearish concerns, but neutral momentum indicators and support at $3,300 have prevented a steeper decline. For a stronger bearish continuation, a decisive break below $3,245 is needed.

Conversely, bulls would need a close above $3,370 to regain control, opening the path to $3,400 and possibly new highs near $3,500.

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