Gold Price Outlook: Struggles Below $3,340 as Traders Await Fed Signals

• Gold attempts mild recovery but stays capped by stronger US Dollar
• Investors remain cautious ahead of FOMC decision and key US data
• Geopolitical concerns offer limited support to XAU/USD near $3,300

The price of gold (XAU/USD) edged slightly higher during Tuesday’s European session, trading just above the recent three-week low near $3,300. While some safe-haven demand persists amid geopolitical risks and pre-FOMC caution, a firm US Dollar and rising bond yields continue to weigh on bullish momentum.

Fundamentals: Gold Faces Tug-of-War Between Risk Sentiment and USD Strength

Gold’s latest rebound comes as investors digest the weekend’s EU-US trade agreement, which—along with the US-Japan deal and ongoing US-China talks—has improved risk sentiment. However, this optimism also boosted the US Dollar, limiting gold’s upside potential.

Meanwhile, traders are turning their attention to the Federal Reserve’s policy decision on Wednesday. Although no rate change is expected, markets are keenly awaiting Fed Chair Jerome Powell’s comments for clues on the rate-cut outlook.

The US Dollar Index surged to a multi-month high on Monday—its strongest daily gain since May—adding downside pressure to gold, which extended its losing streak to four consecutive sessions. However, USD bulls paused ahead of Wednesday’s event risk, offering gold slight breathing room.

Adding to geopolitical tension, US President Trump has set a 10–12 day deadline for Russia to de-escalate the Ukraine conflict, threatening severe sanctions and 100% secondary tariffs on countries continuing trade with Russia. This undercurrent of global uncertainty offers limited support to gold prices.

Market Movers Today:

• JOLTS Job Openings
• US Consumer Confidence
• FOMC Meeting (Wednesday)
• US-China trade negotiations

Technical Outlook: Bearish Bias Persists Below $3,340

Gold has repeatedly failed to break above the $3,434–$3,435 resistance, forming a multi-top pattern on the daily chart. Momentum indicators such as the RSI are turning negative, signaling a downside bias.

• Immediate support: $3,300 (psychological level)
• Next downside target: $3,260–$3,255 (100-day SMA + horizontal support)
• Deeper support: $3,222 and $3,200 zones

To the upside:

• Initial resistance: $3,340
• Stronger barrier: $3,367–$3,368
• Major resistance: $3,434–$3,435
• Breakout target: $3,500 (ATH region)

A decisive break below $3,300 could invite further selling pressure, while a sustained move above $3,368 may trigger a short-covering rally toward the $3,400 and eventually the $3,500 zone.

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