gold prices started Wednesday with a cautious tone following a notable decline that broke through key support levels. The precious metal faced downward pressure amid ongoing geopolitical uncertainties and shifts in Federal Reserve policy expectations. After closing below the 50-day moving average on Tuesday, gold trading remains subdued, with technical indicators suggesting a bearish sentiment.
Market participants are awaiting additional cues before making significant positions. The upcoming release of the Federal Reserve’s June meeting minutes is highly anticipated, as it could provide insights into future rate adjustments amidst a backdrop of heightened trade tensions. Currently, the market assigns a roughly 60% probability of a rate cut in September, down from earlier levels, indicating growing uncertainty.
Trade developments continue to influence investor sentiment. The extension of tariffs negotiations by U.S. President Donald Trump until August 1 has temporarily alleviated concerns over immediate trade disruptions but keeps overall tensions elevated. Moreover, renewed threats include increases of 25-40% on tariffs for multiple countries and proposed additional levies on BRICS nations, which has bolstered the U.S. dollar. A stronger dollar tends to weigh on non-yielding assets like gold , pressuring prices further.
Chinese economic data added limited support, with consumer inflation nudging higher and producer prices declining at a steeper-than-expected pace. These figures did little to alter the overall cautious tone of the market, as traders remain focused on trade-related headlines and monetary policy outlooks.
Technically, gold broke below the 50% Fibonacci retracement level from its recent rally, with the 14-day Relative Strength Index entering bearish territory around 44.5. This signals increased selling pressure, with critical support levels at approximately $3,297 — the 38.2% Fibonacci retracement — and $3,248, the monthly low. Resistance levels begin at around $3,346, aligned with the 21-day moving average, with further resistance at the 23.6% Fibonacci level of approximately $3,377. Sustained moves below key support could open the door to further declines toward the $3,250 region, while any recovery would need strong acceptance above the $3,346 threshold to regain upward momentum.
