Gold Rises as Dollar Pauses and Fed Holds Rates Steady
Gold prices rebounded Thursday, climbing over 1% after a brief pullback to one-month lows during Wednesday’s sell-off.
The move higher reflects a combination of a softer U.S. dollar, declining Treasury yields, and renewed investor interest ahead of upcoming economic data and tariff deadlines.
Traders are watching closely as gold reclaims the June 30 settlement at $3303.15 — a key monthly level that could determine directional bias going into August.
At 10:35 GMT, XAU/USD is trading $3303.43, up $28.14 or +0.86%.
Fed Leaves Rates Unchanged, But Inflation Concerns Remain
The Federal Reserve held interest rates steady at 4.25%–4.50% on Wednesday, as expected. However, Chair Jerome Powell offered no firm guidance for the September meeting, noting it was “too soon” to say whether the Fed will cut.
Some dissent within the Fed — with officials Bowman and Waller opposing the decision — underscores growing uncertainty in the committee. Powell signaled a wait-and-see approach, pointing to risks from recently announced tariffs and upcoming inflation data.
The Fed’s preferred inflation gauge, the core PCE index, is due later Thursday. Economists forecast a 0.3% month-on-month increase and a 2.5% annual rise. Market participants will scrutinize the data for signals on whether tariffs are beginning to drive up prices — a factor that could delay any potential rate cuts.
Gold Price Forecast
Every new Gold analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Gold forecastsChina Trade Deal Uncertainty Boosts Safe-Haven Gold Demand
Fresh tariff measures from President Trump have also lifted demand for gold. On Wednesday, Trump reinstated and expanded levies on imports from South Korea, Brazil, and India, while ending exemptions for small-value overseas shipments. A 15% tariff on South Korean goods was confirmed, and a 50% tariff on Brazilian imports was announced.
Though Trump expressed optimism about trade talks with China, markets remain wary of further disruptions as the August 1 deadline for reciprocal deals looms.
Dollar Rally Stalls as Treasury Yields Ease
The dollar pulled back slightly after a month of gains, with the U.S. Dollar Index retreating to 99.77. Even so, the greenback remains on pace for its first monthly advance of 2025, supported by the Fed’s hawkish tone and relative U.S. economic strength.
Treasury yields edged lower Thursday, with the 10-year yield dipping to 4.36% and the 30-year falling to 4.887%. Lower yields have helped gold recover some ground after Wednesday’s sell-off, which tested key support at $3268.12.
Gold Prices Forecast: Bullish Momentum Builds If Monthly Close Holds
With gold reclaiming the $3300 zone and the dollar cooling from recent highs, bullion is showing signs of renewed buying interest.
Traders should monitor the monthly close; a finish above the June 30 settlement of $3303.15 would signal resilience and strengthen bullish sentiment.
A break below support at $3268.12 would shift focus toward the next key floor at $3244.41.
Barring a surprise surge in the PCE data or hawkish Fed commentary, the setup currently leans bullish heading into August.
More Information in our Economic Calendar.
