Precious Metal Holds Key Support
🏅 Gold Price Forecast: XAU/USD Slips to Near $3,380 on Resilient U.S. Dollar 📅 Date: Wednesday, August 27, 2025
Gold price (XAU/USD) fell during Wednesday’s European trading hours, hovering around $3,380 per troy ounce after posting significant losses in the prior session. The decline came as the U.S. Dollar (USD) held firm despite intensifying concerns over the independence of the Federal Reserve (Fed).
The ongoing rift between the U.S. President and the Federal Reserve has heightened market uncertainty. The removal of Fed Governor Lisa Cook by the U.S. President, and her subsequent decision to file a legal challenge, have drawn attention to the political pressures facing the central bank.
Speaking at a Cabinet meeting on Tuesday, the U.S. President stated a willingness to comply with any court decision, yet signaled little concern over Cook’s lawsuit.
Analysts note that removing a policy‑hawk member could increase the likelihood of significant interest rate cuts, especially amid the President’s continued push to lower borrowing costs. Historically, rate cuts tend to improve the appeal of non‑interest‑bearing assets like gold.
According to the CME FedWatch Tool, traders are now pricing in over 87% odds of at least a 25‑basis‑point rate cut at the September Fed meeting, up from 84% the previous day. Lower rates reduce the opportunity cost of holding precious metals and can bolster demand.
Focus now turns to key upcoming U.S. economic releases:
Both are expected later this week and could set the short‑term trajectory for gold.
Technically, gold is testing support in the $3,370–$3,380 range. A break below this zone could open the way toward the next major support around $3,335. On the upside, a push through resistance at $3,420 might attract fresh buying interest, potentially targeting last month’s highs.
The daily Relative Strength Index (RSI) sits near the neutral 50 level, signaling reduced momentum and the possibility of a consolidation phase before the next directional move.