Dollar Weakness Supports Gold Prices

📊 Gold (XAU/USD) Analysis – USD Selling Pressure and Fed Rate‑Cut Scenario

Gold recovered part of yesterday’s drop to a two‑week low during Asian trading today, though signs of strong bullish momentum remain absent. Softening demand for the US Dollar—driven by heightened expectations that the Federal Reserve will begin its rate‑cutting cycle in September—has been the main factor providing short‑term support for the yellow metal.

📌 Key Market Highlights

• US Producer Price Index (PPI) came in above expectations (3.3% vs. 2.5% forecast), initially boosting the USD, but those gains faded in Asian hours.
• The FedWatch tool now prices in two 25‑bp rate cuts by the end of 2025, limiting further USD appreciation and supporting gold.
• Improved risk appetite and a three‑month extension of the US–China tariff truce have reduced safe‑haven demand, restraining any sharp gold rally.
• Traders await key US data—Retail Sales, New York Manufacturing Index, and University of Michigan Consumer Sentiment—which could set the near‑term XAU/USD direction.

📉 Technical Outlook

• Key Resistance: $3,355 (100‑hour SMA). A break above could open the path to $3,375 and even $3,400.
• Key Supports: $3,330 (recent two‑week low). A break here could expose $3,300 and strengthen the bearish scenario.
• Hourly oscillators remain in negative territory, confirming short‑term selling pressure.

📈 Summary
Gold currently sits between two opposing forces: limited USD selling pressure on one side and a risk‑on market mood on the other. As long as prices stay below $3,355, the downside risk prevails, and any upward move may face selling pressure. A sustained break above this resistance would be needed to justify fresh bullish positions.