Gold News: 50-Day Moving Average Caps Gains, Eyes on Powell at Jackson Hole and Inflation

Gold Pressured by 50-Day Moving Average as Fed, Geopolitics Dominate Focus

Gold prices edged slightly lower on Monday, with traders showing hesitance near key technical resistance while awaiting potential market-moving signals from the Federal Reserve and U.S. geopolitical developments.

The metal struggled to sustain momentum after being rejected at the 50-day moving average of $3349.30, a level that continues to define near-term price action.

At 15:16 GMT, XAU/USD is trading $3334.80, down $0.90 or -0.03%.

Fed Policy Outlook, Jackson Hole in Spotlight

The main event for gold traders this week is the release of the Federal Reserve’s July meeting minutes on Wednesday and Fed Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday. Markets are largely pricing in a 25 basis point rate cut for September, but a 50 basis point reduction remains on the table depending on incoming data.

Fed fund futures currently show an 85% probability of a rate cut next month. July’s producer price inflation came in hotter than expected, cooling some of the rate cut bets triggered earlier by weaker CPI data. Strategists say Powell is unlikely to commit to a rate path before reviewing August labor data, though any dovish tilt could fuel a gold rally.

Yields across the Treasury curve were little changed Monday. The 10-year yield dipped to 4.345%, while the 2-year settled at 3.773%. The mild pullback in yields offered limited support for gold, which tends to benefit from falling real yields and policy easing expectations.

Geopolitical Uncertainty Offers Limited Support

Gold also drew some attention as investors tracked political developments in Washington, where former President Donald Trump met Ukrainian President Volodymyr Zelenskiy and several European leaders to push for a resolution to the Russia-Ukraine conflict. While the meeting signals ongoing geopolitical risk, gold’s response was muted, with traders more focused on monetary policy signals.

The dollar rose against major peers, with the euro slipping 0.21% to $1.1673 and sterling falling 0.1% to $1.3538. A stronger dollar often limits gold’s upside by making the metal more expensive for foreign buyers.

Gold Prices Forecast: Key Technical Levels to Watch

The rejection at $3349.30 keeps gold vulnerable to further weakness unless bulls regain control above the 50-day moving average. A sustained break above could open the door to minor tops at $3374.81 and $3409.43, with the July 23 high at $3439.04 the next major upside target.

Conversely, failure to hold above current levels may drive prices toward $3310.48. A clean break below that could accelerate selling toward key support at $3268.12 and $3244.41.

Outlook: Neutral to Bearish Near-Term

Without a strong policy shift from the Fed or fresh geopolitical risk premium, gold remains under pressure below its 50-day average. Traders should watch Powell’s Jackson Hole remarks closely, as any dovish tone could reverse the current bias. Until then, the technical rejection suggests downside risks remain.

More Information in our Economic Calendar.