Gold (XAU/USD) Stabilizes Above $3,280 as Market Eyes Fed, Powell, and Key Resistance at $3,350

GOLD (XAU/USD) HOLDS ABOVE $3,280 AS FED CUT HOPES CLASH WITH RESISTANCE CEILING NEAR $3,350

Inflation Eases, Dollar Retreats, and Gold Firms Around Key Pivot Levels

Gold (XAU/USD) opened the week at $3,284.30, advancing 0.3% from Friday’s close of $3,273.70, stabilizing after a weekly loss of 2.4%. The rally stems from renewed Fed rate cut bets and a tumbling U.S. dollar, as the US Dollar Index flirts with a multi-year low. Personal spending fell 0.1% in May, and income dropped 0.4%, fueling dovish speculation. The core PCE index rose 2.7% YoY, while headline PCE came in at 2.3%, both within market expectations, leaving the Fed with room to cut if growth slows further.

Geopolitical Thaw Pressures Safe-Haven Demand While Trump’s Fiscal Push Revives Bullion Bulls

Peace progress between Israel and Iran and a thaw in U.S.-China relations weigh on safe-haven bids. Yet, gold remains supported by Trump’s proposed $3.9 trillion spending bill and political pressure for the Fed to cut rates to 1%, despite the 10-year yield easing to 4.255%. Treasury curve flattening points to slower growth, and with multiple trade deals expected by July 9, bullish interest in gold is cautiously rising.

Technical Picture: Gold Trapped Below $3,350 With Downside Risk to $3,170 Still Intact

Gold faces critical resistance at $3,335–$3,350, a zone marked by the Bollinger Band ceiling and prior support breakdowns. Monday’s intraday high of $3,296 temporarily pierced resistance at $3,285, but RSI (14) on the 4-hour chart remains below 50, suggesting fragile bullish momentum. Key support rests at the 100-day EMA around $3,170, with deeper downside magnets at $3,120 and $3,087, last seen in mid-May retracements. Upside acceleration is likely only with a confirmed close above $3,350, targeting $3,400 and $3,425.

Gold Futures Below $3,300 as Equity Rally Pulls Liquidity Away From Precious Metals

Futures on Gold (GC=F) began Monday under $3,300 for the first time since early June, weighed down by equity optimism as the S&P 500 hit 6,173.07. While XAU/USD recovered above $3,280, investor appetite is clearly diversified. The equity rally reflects relief from geopolitical risks and optimism around rate cuts—factors that normally benefit gold. However, in this cycle, stocks are drawing capital from bullion, especially as yields compress.

XAU/USD Intraday Structure and Momentum Flags Cautious Recovery

Gold rebounded from a Monday low of $3,244.42, recovering off the May 29 bottom of $3,245.56. The 50-day moving average sits near $3,321.10, acting as an immediate resistance ceiling. Failure to retake that level could reintroduce selling toward $3,228.38, and if breached, downside momentum may extend toward $3,166.46 and even $3,087.70, where the May 15 low at $3,120.76 remains a critical defense.

Tariff Deadlines and Central Bank Flows Anchor Volatility Outlook

Trump’s tariff policy remains pivotal. While a blanket 10% tariff remains in place, higher country-specific levies are paused until July 9. Trade agreements with China, the U.K., and other partners are progressing, with positive outcomes seen as bearish for gold. Meanwhile, central banks continue to accumulate gold, especially from the BRICS bloc. Long-term bullish drivers remain intact if real rates weaken further.

Sentiment and Trend Signals Mixed as Bulls Face Structural Headwinds

The longer-term bullish structure remains intact, but near-term headwinds linger. The 14-day RSI around 41.50 signals weak momentum. Market pricing via CME FedWatch implies a 91.5% probability of a September rate cut, potentially triggering a fresh rally if confirmed by non-farm payroll data. Until then, range-bound behavior between $3,170 and $3,335 is expected.

Retail vs. Institutional Flows: ETF Demand Diverges from Physical Buyers

Retail interest is cautiously rising, yet ETF inflows remain tepid. While physical demand from emerging markets holds firm, Western speculative flows have decelerated. Much of the short-term action is driven by algorithmic momentum traders watching the $3,300 barrier and economic releases, particularly Friday’s non-farm payrolls and manufacturing PMIs.

Gold’s 1-Year Surge Remains Intact Despite Recent Consolidation

Over the past 12 months, gold has gained +41.2%, rising from $2,325.40 in late June 2024 to over $3,284.30 today. Though price declined 0.9% over the past month and 2.4% this past week, the broader trend reflects persistent inflation hedging, central bank diversification, and concern over fiscal sustainability.

Breakout or Breakdown? The $3,350 Decision Zone Defines Short-Term Direction

Traders now eye whether bulls can pierce and hold above $3,350. A confirmed breakout opens the door to $3,400, with Bollinger expansion likely to follow. Failure to do so brings the $3,250 and $3,205 levels back into focus. With Fed Chair Powell’s speech, NFP, and ADP data all scheduled this week, XAU/USD volatility is likely to surge.

Verdict: XAU/USD – HOLD (Technically neutral with bullish bias; breakout above $3,350 needed for upside conviction, downside remains protected by strong long-term fundamentals.)

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