Introduction to Gold Market Trends
The gold market has experienced a "rise then retreat" pattern over the past week, with prices consolidating within the $3,300 to $3,430 range. This trend is expected to continue, with the key resistance at $3,430 and the short-term 5-day EMA support indicating persistent selling pressure above. However, bulls have staged a renewed push, regaining footing and testing the 50-day moving average.
Technical Analysis of Gold Prices
If the 50-day moving average is convincingly breached, the previous high of $3,370 will serve as a critical intermediate resistance on the way to retesting $3,400. On the other hand, if the price retreats, $3,300 – the lower bound of the June consolidation zone – will provide important support. The negative correlation between gold, the US dollar index, and US Treasury yields is a key factor to consider, as it can impact gold prices.
Impact of Global Trade Easing on Gold Prices
A core market dynamic remains progress in tariff negotiations between the US and major economies. The US has secured key agreements with Japan and the EU, which has eased market concerns over escalating trade friction. This change has sharply boosted risk assets in the short term, particularly attracting flows into US, Japanese, and European equities, thereby lifting risk appetite. As a result, gold has experienced a temporary cooldown in safe-haven demand, with some funds rotating into stocks and higher-yielding assets, pressuring prices in the short run.
Fundamental Divergence and Gold Prices
While the market focuses on the short-term boost from trade easing for risk assets, structural risks behind these agreements should not be overlooked. The "initial inflation followed by later recession" scenario increases uncertainty around the Fed’s policy path. Currently, the risk of inflation rebound may keep the Fed cautious before a potential September rate cut, limiting gold’s near-term upside. However, if economic data deteriorate or growth outlook weakens, the path to easing could open quickly, providing upward momentum for gold.
Geopolitical Conflicts and Gold Market
Geopolitical conflicts remain an unavoidable variable for gold markets. Unrest in the Middle East, the Russia-Ukraine war, and tensions in parts of Southeast Asia continue, reinforcing gold’s reserve appeal. The growing government fiscal deficit and weakening US economic resilience have prompted global central banks to increase gold reserves, a key support factor for future gold prices.
Upcoming Events and Gold Price Volatility
Three major events – the tariff talks, Fed rate decisions, and nonfarm payroll reports – are lined up, likely to amplify gold price volatility. The US-China meeting in Stockholm will be a key catalyst, with discussions expected to cover China’s rare earth export controls and its strategy on Russian oil imports. The FOMC meeting, US Q2 GDP, and nonfarm payrolls report will also be closely watched, as they will provide clues on the Fed’s policy stance and impact gold prices.
Critical Data Ahead
The FOMC statement and Fed Chair Powell’s remarks will be key to gauging September’s policy stance. If the FOMC expresses ongoing concern over sticky inflation or maintains strong confidence in economic resilience, markets may push back September rate cut expectations, pressuring gold. Conversely, if GDP data released the same day significantly undershoot forecasts and Powell signals dovishness, rate cut expectations could reignite, boosting gold.
Conclusion
In conclusion, gold remains range-bound as tariff easing and retreating safe-haven flows weigh on prices in the near term. However, fiscal deficits, central bank gold buying, and downward pressure on the dollar provide a solid floor. While short-term volatility is inevitable, this "bottoming in a range" phase sets the stage for medium-to-long-term gains. As the gold market awaits direction from upcoming events, investors should keep a close eye on the technical and fundamental factors driving gold prices.
