Gold News: Traders Watch Fed Policy Clues and Inflation Data for Gold Price Prediction

Gold Prices Forecast: Will the Fed’s Dovish Tilt Drive an Upside Breakout?

Gold is trading slightly lower on Thursday as it hovers around two key technical levels — the short-term pivot at $3353.58 and the 50-day moving average at $3349.00. Price action at these thresholds will likely dictate near-term direction, with bulls eyeing a break above the August 8 minor high at $3409.43. A downside breach of $3349.00 could expose gold to deeper losses toward $3331.17, and possibly down to the long-term support at $3310.48.

At 12:26 GMT, XAU/USD is trading $3355.53, down $0.160 or -0.00%.

Firmer Dollar Caps Gold, But Dovish Fed Expectations Lend Support

The U.S. dollar index firmed modestly, pressuring gold, but remained near multi-week lows. Traders are largely positioning for an interest rate cut at the Fed’s next meeting. According to LSEG data, markets are fully pricing in a September rate cut, with roughly 7% odds of a 50 basis-point move. U.S. Treasury Secretary Scott Bessent stoked these expectations, stating that the Fed should consider a “series of rate cuts” and open the door to an aggressive start.

Non-yielding gold typically gains in a lower interest rate environment, and the market is increasingly betting that the Fed will ease policy further before year-end. Treasury yields continued to drift lower, with the 10-year at 4.208% and the 2-year at 3.662%, reflecting growing conviction around policy easing.

US Inflation and Jobs Data to Steer the Next Leg

All eyes are now on Thursday’s U.S. Producer Price Index and weekly jobless claims for further confirmation that the Fed has room to cut. Earlier in the week, July’s CPI data came in softer than expected, easing concerns about tariff-driven inflation. Traders are betting that continued labor market softness and subdued inflation will justify the Fed’s dovish lean going into its Jackson Hole symposium next week.

Commodities strategist Nitesh Shah noted that despite Thursday’s marginal price dip, gold remains well-supported by the broader rate environment. The market will look to fresh data to reinforce this bullish bias.

Market Forecast: Bullish Outlook If Key Resistance Clears

Gold remains in consolidation, but the broader setup favors the bulls as dovish Fed rhetoric and falling yields provide fundamental support. A sustained move above $3353.58 will likely open the door toward $3409.43.

On the downside, failure to hold the 50-day MA at $3349.00 risks a drop to $3331.17, with $3310.48 as the next key support. Near-term, the gold prices forecast leans bullish, contingent on upcoming inflation data validating rate-cut bets.

More Information in our Economic Calendar.