Gold prices struggle to attract buyers as reduced expectations for a Fed rate cut bolster the USD

Gold (XAU/USD) remains under selling pressure for the sixth consecutive day on Wednesday, hovering just above a three-week low near the $2,605-$2,604 region hit the previous day. The US Dollar (USD) remains strong, trading near a seven-week high, as traders scale back expectations for another large interest rate cut by the Federal Reserve (Fed). Additionally, news of a potential ceasefire between Hezbollah and Israel further weakens demand for the safe-haven asset.

The decline is also driven by technical selling following the breakdown of the $2,630 support level, which marked the lower boundary of a short-term trading range. However, traders may avoid aggressive bearish positions ahead of the release of the FOMC meeting minutes. Upcoming US Consumer Price Index (CPI) and Producer Price Index (PPI) data are also expected to influence the direction of the non-yielding yellow metal.

Daily Digest Market Movers: Gold trades near multi-week low as USD strengthens on less dovish Fed outlook

• The US Dollar remains steady near a multi-week high, supported by diminishing odds of an aggressive Fed policy easing, which pushed Gold below the critical $2,630 support on Tuesday.
• According to the CME Group’s FedWatch Tool, there is an over 85% chance of a 25-basis-point rate cut at the Fed’s November meeting, with expectations of a 50 bps cut by year-end.
• New York Fed President John Williams stated that the September 50 bps rate cut should be viewed as a guiding principle for future actions.
• Fed Governor Adriana Kugler noted that policy decisions will remain data-driven, and further cuts could be considered if inflation trends as expected.
• Boston Fed President Susan Collins highlighted that current monetary policy is helping to cool inflation, though core inflation remains elevated.
• Fed Vice Chair Philip Jefferson remarked that economic activity is growing steadily, while inflation has eased, and the labor market has moderated from its overheated state.
• Yields on the 10-year US Treasury remain above 4%, adding pressure to the non-yielding bullion.
• Geopolitically, Hezbollah hinted at a potential ceasefire with Israel, easing some of the safe-haven demand for Gold.

Technical Outlook: Gold bears maintain control below the $2,630 support level

From a technical perspective, the break below $2,630—a key support level—could signal a fresh trigger for bearish momentum. However, daily chart oscillators have not yet confirmed a strong negative bias, so caution is warranted before expecting further declines. A sustained move below $2,600 could extend the corrective drop toward the next support near $2,560, followed by the $2,535-$2,530 zone and the psychological $2,500 mark.

On the upside, the $2,630-$2,635 region now acts as immediate resistance. Any rebound might be seen as a selling opportunity, likely capped near the $2,657-$2,658 horizontal barrier. A break above this level could lift Gold toward the $2,670-$2,672 supply zone, with a challenge of the all-time high near $2,685-$2,686, followed by the $2,700 mark, becoming the next target for bulls.