Gold Prices Stage Modest Rebound

Gold Prices Rebound from Two-Week Low Amid Falling Yields and Fed Rate Cut Expectations

Gold (XAU/USD) recovered part of its recent losses on Monday after hitting its lowest level in over two weeks, supported by fundamental drivers. In early European trading, the precious metal posted modest gains, with falling U.S. Treasury yields and rising expectations for the Federal Reserve to resume its rate-cut cycle in September acting as key catalysts.

Key Market Highlights:

• Lower bond yields have boosted the appeal of non-yielding assets such as gold.
• According to the CME FedWatch Tool, markets are pricing in at least two 25-basis-point rate cuts by the Fed before the year ends.
• Investors are adopting a cautious stance ahead of the planned meeting between Donald Trump and Volodymyr Zelenskyy, followed by peace talks with European leaders.
• U.S. Producer Price Index (PPI) growth in July was the strongest monthly increase since 2022, tempering expectations for aggressive rate cuts.
• University of Michigan data shows rising inflation expectations alongside a decline in consumer confidence.

Technical Outlook:

• A rebound from the 61.8% Fibonacci retracement level and a break above the 200-period Simple Moving Average (SMA) on the 4-hour chart indicate short-term bullish momentum.
• Key resistance levels: $3,372–$3,374, followed by $3,400 and the monthly high near $3,410.
• Key supports: $3,346 and then $3,324–$3,323; a break below these could open the way toward $3,300.

Conclusion:
The combination of supportive fundamentals and positive technical signals strengthens the short-term bullish case for gold. However, proximity to resistance levels and the market’s wait-and-see stance ahead of critical Fed events could limit further upside until a clearer directional cue emerges.