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Gold price awaits a new catalyst to breach the critical $3,400 resistance level.
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Federal Reserve officials adopt a more dovish tone on monetary policy.
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U.S. President Trump is expected to unveil tariff sanctions on China over its oil purchases from Russia.
Gold (XAU/USD) remains capped below the critical $3,400 mark during the European session on Thursday, unable to extend gains despite increasingly dovish signals from the Federal Reserve and renewed geopolitical tensions.
On Wednesday, several key Federal Reserve officials expressed support for interest rate cuts amid signs of economic slowdown and labor market weakness. Minneapolis Fed President Neel Kashkari, San Francisco Fed President Mary Daly, and Fed Governor Lisa Cook all voiced the need for policy easing. Kashkari, speaking to CNBC, stated, “The economy is slowing and the Fed needs to respond to the slowing economy,” adding that “two rate cuts this year still seem appropriate.”
According to the CME FedWatch Tool, market participants have nearly fully priced in a 25 basis point rate cut for the September policy meeting.
Lower interest rates typically benefit non-yielding assets like gold, increasing their appeal as the opportunity cost of holding them diminishes.
Meanwhile, former U.S. President Donald Trump has resurfaced trade-related tensions, which could boost demand for safe-haven assets such as gold. Trump suggested that China could face tariffs for importing oil from Russia. Additionally, on Wednesday, he announced a 25% hike in import duties on Indian goods due to India’s continued oil trade with Russia.
Technical Outlook: Symmetrical Triangle Holds the Key
From a technical perspective, gold is trading near the upper boundary of a Symmetrical Triangle pattern, currently hovering around $3,400. This resistance line has been drawn from April’s high near $3,500, while the support line originates from the May low of $3,120.85.
The price remains marginally above the 20-day Exponential Moving Average (EMA), currently near $3,350, indicating that the short-term trend remains tilted to the upside.
The 14-day Relative Strength Index (RSI) fluctuates within the neutral range of 40–60, signaling indecision among traders and the absence of strong momentum in either direction.
Key Levels to Watch
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Support: A drop below the May 29 low of $3,245 could trigger a move toward $3,200, with the next key support at the May 15 low of $3,121.
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Resistance: A firm breakout above the psychological level of $3,500 would take gold into uncharted territory, opening the door toward potential upside targets at $3,550 and $3,600.
