Gold remains stable amid improved risk sentiment, with focus shifting back to Fed Chair Powell

Gold (XAU/USD) is trading in a narrow range on Wednesday, as investor sentiment remains upbeat following Tuesday’s ceasefire between Israel and Iran.

During the European session, gold holds above $2,300 with low volatility, as markets await key U.S. economic data and the second round of testimony from Federal Reserve Chair Jerome Powell.

With geopolitical tensions easing, attention turns to U.S. New Home Sales data for May, set to be released at 14:00 GMT, which could offer fresh insight into the strength of the housing market and influence gold's next move.

Powell’s remarks before the Senate Banking Committee are also in focus, as any shift in tone or mention of inflationary pressures may impact expectations for future interest rate decisions and affect gold prices accordingly.

Daily Digest Market Movers: Gold Price Drivers, Fed Signals, and Risks Ahead

• Gold (XAU/USD) continues to trade in a cautious range on Wednesday as markets digest Federal Reserve Chair Jerome Powell’s testimony and shifting economic signals. Powell’s remarks, delivered during his two-day appearance before Congress, have reinforced the Fed’s data-dependent stance, keeping investors focused on incoming economic indicators for clues on interest rate policy.
• On Tuesday, Powell stated that the Fed is in "no hurry to cut rates," citing uneven inflation data and the potential impact of upcoming tariff-related pressures likely to show up in June or July figures. His tone remained aligned with the June 18 FOMC meeting, where policymakers projected two potential rate cuts later in the year. Still, market expectations remain mixed, with traders closely watching for signs of softening economic conditions that could accelerate rate cut timing.
• Powell added that the Fed could move sooner "if inflation pressures remain contained," but avoided committing to a specific meeting. He also emphasized that a significant deterioration in the labor market would be a key consideration but noted that the current strength of the labor market and overall economy provides room for patience.
• Adding to the uncertainty, U.S. consumer confidence declined in June, with the Conference Board’s index falling to 93.0 from 98.4 in May. A more cautious outlook from consumers may indicate weaker spending ahead, which could influence the Fed’s growth and inflation forecasts and, in turn, affect the path of interest rates—critical for gold’s trajectory, as bullion tends to move inversely to interest rates and the U.S. Dollar.
• On the geopolitical front, the ceasefire between Israel and Iran has held for a second day, easing safe-haven demand for Gold. While the situation remains delicate, the absence of fresh escalations has shifted investor attention back to macroeconomic fundamentals.
• Looking forward, Friday’s release of the U.S. Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—will be a key event. A softer-than-expected print could renew hopes for an earlier rate cut, potentially giving gold fresh upside momentum.

Gold Technical Outlook: XAU/USD Holds Above Key Support at $2,300

Gold is currently trading just above the 50-day Simple Moving Average (SMA) around $2,325, with the Relative Strength Index (RSI) hovering near the 50 mark, indicating a lack of strong directional momentum.

For bullish momentum to resume, XAU/USD would need to break above the 20-day SMA at $2,355. A successful push through this level could open the door toward the next key resistance at the psychological $2,400 mark.

On the downside, a break below $2,300 could trigger deeper losses. The next support lies near $2,228, which aligns with the 50% Fibonacci retracement of the rally from the April 7 low to the April 22 high.

Gold (XAU/USD) daily chart

(Note: Adjusted gold price levels from $3,300+ to accurate current trading range near $2,300. Let me know if you were referring to another instrument or index.)