Gold Daily | Gold Dips 0.23% as Dollar Strengthens; Market Awaits Fed Clues and PCE Data

【Latest Gold Price and Recent Trends】

Gold prices have retreated by 0.23% to $3,362, falling from the recent high of $3,378 as the U.S. dollar strengthens. The market remains buoyed by Federal Reserve Chairman Powell’s dovish hints, which increase rate cut bets.

【Technical Analysis】

On the daily chart, the short-term outlook remains optimistic as long as the 14-day RSI stays above 50, currently around 53.5. If the 21-day SMA crosses above the 50-day SMA at Monday's close, it would confirm a bullish trend. Resistance stands at last Friday's high of $3,379, followed by $3,400. A break below the $3,346 range may open the path for further decline, with strong support at the 100-day SMA of $3,320. Since December 31, 2024, gold hasn't closed below this level.

【Market Sentiment and Economic Background】

Following Powell's speech at the Jackson Hole symposium, the market is pricing an 88% chance of a Fed rate cut next month, up from 75%. Despite profit-taking pressures, analysts expect the gold decline to be temporary. A weak dollar could support gold as the Fed's dovish stance is re-evaluated. Traders are digesting remarks from St. Louis Fed President Bullard, who calls for more data to decide on supporting a September rate cut. Upcoming U.S. economic data, including new home sales and PCE, could offer new policy clues. Investors await Friday's PCE data, expected to show core inflation at 2.9%, the highest since the end of 2023.

【Analyst Opinions】

Matt Simpson from City Index notes strong support for gold near $3,350, encouraged by Powell's dovish stance. A sustained rally would require softer PCE inflation and weaker jobs data. However, inflation is expected to remain high, potentially limiting gold's gains post-rebound. Meanwhile, Valencia believes gold could face resistance at $3,400 and $3,452 if it climbs above $3,400, but notes geopolitical risks have eased after optimistic news about Russia-Ukraine.