Gold prices experienced a decline of 0.28% in response to Federal Reserve Chair Jerome Powell’s remarks at a European Central Bank forum. Powell, adopting a slightly dovish stance, emphasized the need for further progress before considering interest rate cuts. Despite this tone, US Treasury yields remained steady, while the US Dollar fluctuated within its usual range. As a result, the XAU/USD pair traded at $2,324, reflecting the drop in prices.
Powell acknowledged that the disinflation process was underway but highlighted the importance of assessing the situation carefully due to the strength of the US economy and labor market. The Fed Chair recognized the balanced risks associated with the Fed’s dual mandate and emphasized the need to manage them effectively.
In the midst of these developments, US labor data revealed a surprising increase in job vacancies, surpassing expectations. This data underscored the resilience of the labor market, despite the Fed’s current interest rate range of 5.25%-5.50%. Moving forward, market participants are eagerly awaiting the release of the Federal Open Market Committee’s Meeting Minutes, alongside Services PMIs from S&P Global and the Institute for Supply Management.
In addition to these key events, the US Bureau of Labor Statistics released reports showing a significant rise in job vacancies, signaling strength in the labor market. Mixed results were observed in the US manufacturing sector, prompting traders to focus on upcoming service sector data. Market expectations for a 25-basis-point Fed rate cut in September also increased, indicating a shift in sentiment.
From a technical standpoint, gold prices exhibited fluctuations around the Head-and-Shoulders neckline, hovering between $2,320-$2,350. Despite the presence of a bearish chart pattern, the Relative Strength Index (RSI) suggested a neutral momentum, indicating a standoff between buyers and sellers. To sustain a bearish trend, sellers would need to push prices below $2,300, targeting subsequent support levels.
Looking ahead, traders are eyeing key resistance levels beyond $2,350, with potential targets at $2,387 and $2,400 if buyers gain momentum. As market dynamics evolve, the focus remains on upcoming economic indicators and statements from policymakers, such as Fed Chair Powell. These factors will continue to influence gold prices and shape market sentiment in the days to come.