- Gold prices are seeking new catalysts to break through the significant resistance at $3,400.
- Federal Reserve officials appear to be leaning towards a more dovish stance on monetary policy.
- President Trump intends to impose tariffs on China for purchasing oil from Russia.
Gold Price (XAU/USD) is having a hard time surpassing the critical $3,400 mark during Thursday’s European trading. Despite the Federal Reserve officials indicating a possible interest rate cut for the remainder of the year, the precious metal seems hesitant to gain momentum.
On Wednesday, Minneapolis Fed President Neil Kashkari, San Francisco President Mary Daly, and Governor Lisa Cook voiced support for interest rate reductions amid rising concerns about the labor market. Kashkari mentioned in a CNBC interview, “The economy is slowing, and the Fed needs to respond accordingly.” He added that initiating policy rate adjustments could still be necessary soon, and two cuts this year appear fitting.
The CME FedWatch tool shows traders are anticipating nearly a full 25 basis points rate cut at the Fed’s upcoming meeting in September.
Theoretically, interest rates falling due to the Fed’s hints can affect non-revenue assets like gold.
Meanwhile, the prospect of new tariffs from President Trump is expected to drive demand for safe-haven assets like gold. Trump stated on Wednesday that China might face tariffs for buying oil from Russia. On that same day, he raised tariffs on Indian imports of Russian oil by 25%.
Gold Technical Insights
Gold prices are trading near the upper boundary of a symmetrical triangle pattern, which began around the April high of $3,500, with the support level set at $3,120.85 from the May low.
The precious metal is currently slightly above the 20-day exponential moving average (EMA), trading around $3,350, suggesting a potential short-term trend advantage.
The 14-day relative strength index (RSI) fluctuates between 40.00 and 60.00, indicating some uncertainty among traders.
Looking downward, gold prices dipped to $3,121 on May 15, with round-level support at $3,200, should it fall below the $3,245 mark from May 29.
If gold manages to break past the psychological barrier of $3,500, it could enter uncharted territory, facing potential resistance around $3,550 and $3,600.
