Gold Price Recovers from Monthly Low as Traders Await PPI and Powell’s Speech

The gold price (XAU/USD) shows a mild recovery from its lowest point in over a month, touching $3,120 earlier Thursday. A turn in market sentiment is increasing appetite for traditional safe havens like gold. In addition, light selling pressure on the US Dollar is giving gold prices extra support. However, optimism surrounding US-China trade relations is limiting any significant rebound in the gold market.

Key Takeaways for Gold Price

• Gold rebounds modestly after hitting a one-month low near $3,120 earlier today.
• US-China trade optimism and easing recession fears curb major gold price gains.
• Traders look to upcoming PPI figures and Powell’s speech to gauge future policy direction.
• Fed policymakers adopt a careful stance due to unclear inflation trends and economic unpredictability.
• Technical resistance remains near $3,230 while strong support lies at $3,100.

Market Context: Risk Sentiment and Central Bank Policy Influence on Gold Price

Growing hopes for easing global trade tensions are keeping markets stable, limiting sharp moves in gold price. Additionally, President Trump’s remarks on Iran and Ukraine peace talks suggest reduced geopolitical risk, which weakens gold’s safe-haven appeal.

The Federal Reserve’s monetary stance also weighs on gold. Expectations of aggressive interest rate cuts are fading as recession fears ease. Markets now anticipate just over 50 basis points in rate cuts this year, compared to over 100 basis points previously. This shift is pushing US Treasury yields higher, strengthening the USD and limiting upside potential for gold.

Technical Insights: Fibonacci Levels Signal Key Zones

A decline below $3,200 and a break of the 61.8% Fibonacci level from April’s rally indicate bearish momentum. Oscillators on daily charts indicate building negative momentum, pointing toward extended downside risks.

• Key Support Levels: $3,135 first, then $3,100, with $3,060 as the next fallback.
• Resistance Levels: $3,170 (61.8% Fibo), $3,200, $3,230 (50% Fibo), and $3,265.
• Bearish Outlook: Below $3,100 may open the path toward $3,060 support.
• Bullish Reversal: Sustained move above $3,230 could retest $3,300 levels.

Any short-term upward movement is likely to encounter resistance between $3,230 and $3,265, which may attract renewed selling interest.

Expert Opinions and Global Events Add Complexity

Fed Chair Powell’s upcoming speech is closely watched as traders seek policy direction. Recent comments from Fed officials suggest a wait-and-see approach amid inflation volatility and global uncertainty.

• Philip Jefferson (Fed Vice Chair) Trade policy uncertainty may derail recent progress on inflation.
• Austan Goolsbee (Chicago Fed) notes lagged data and advises caution in interpreting current trends.
• Mary Daly (San Francisco Fed) Economy remains strong; advocates a wait-and-see approach on interest rates.

Geopolitical developments remain mixed. Missile activity in the Middle East and ongoing violence in Gaza reflect regional instability. However, these events have not significantly lifted gold’s appeal, indicating that broader market optimism may be prevailing.

Conclusion: Limited Upside for Gold Amid Mixed Signals

While gold prices experience a modest rebound from recent lows, significant gains remain capped by a firm US Dollar and improving economic sentiment. Traders are likely to stay cautious ahead of the US Producer Price Index report and Fed Chair Powell’s speech, both expected to provide important clues on future monetary policy.

Expect tight trading ranges with downside risks near $3,100 and stiff resistance at $3,230 unless new economic data or geopolitical developments shift the current market outlook.

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