Gold (XAU/USD) rebounded during the Asian session on Thursday, recovering much of the previous day's losses to the $4,583 region, which marked the weekly low. Despite this recovery, gold remains below its highest level since May 14, reached on Tuesday, as traders await US Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday for guidance on future monetary policy. The outcome of this speech is expected to significantly influence US Dollar price dynamics and provide direction for gold's next move [1].
US inflation data released on Wednesday was slightly hotter than expected, supporting the case for at least one Fed rate hike by year-end. The Commerce Department reported that the US Personal Consumption Expenditures (PCE) Price Index stayed at 3.7% year-over-year through July, exceeding expectations, while the core PCE index, excluding food and energy, remained steady at 3.3%, as anticipated. This persistent inflation is fueling debate over whether the Fed should raise rates or hold them steady [1].
Despite hawkish expectations for the Fed, US bond yields remain subdued due to the Treasury's buyback strategy. Additionally, optimism surrounding a potential US-Iran peace deal and the partial reopening of the Strait of Hormuz is limiting upside for the US Dollar and providing support for gold. Media reports indicate that the US and Iran have reached a new ceasefire deal, which may be announced soon. Iran’s Deputy Foreign Minister Kazem Gharibabadi stated that Tehran and Oman have agreed on a temporary maritime route for ships, but warned that the Strait will not fully reopen until the US fulfills its commitments under an interim peace deal signed in June. This ongoing geopolitical risk is supporting crude oil prices and the safe-haven Greenback, which could cap gold's gains [1].
Technical analysis shows gold maintains a bullish near-term bias above the $4,525-$4,515 support zone, which includes the 200-day Simple Moving Average and the 38.2% Fibonacci retracement of the March-June decline. The Relative Strength Index (RSI) at 68.21 is near overbought territory, and the MACD remains positive, indicating constructive but stretched upside momentum. Analysts suggest waiting for strong follow-through buying and a sustained move above $4,700 before positioning for further gains in XAU/USD [1].
CONCLUSION
Gold has rebounded on softer US yields and ongoing geopolitical tensions, but remains below recent highs as traders await Fed Chair Warsh's speech for policy direction. Persistent inflation and subdued bond yields are supporting gold, though technical indicators suggest upside momentum may be stretched. Market participants are advised to wait for a decisive move above $4,700 before expecting further gains.