Key Moments
- Gold (XAU/USD) trades below $4,500 after touching its highest level since early June earlier on Thursday.
- Hawkish FOMC Minutes, inflation concerns tied to oil prices, and US-Iran frictions have supported a rebound in the US Dollar.
- Falling long-term US yields after a Treasury buyback announcement have helped limit downside pressure on the non-yielding metal.
Gold Edges Lower as Dollar Finds Support
Gold (XAU/USD) is holding modest losses during the Asian trading session, changing hands just under the $4,500 threshold. The metal remains close to the peak reached earlier on Thursday, which marked its strongest level since early June. A stabilization in the US Dollar after its sharp slide to a three-month low has encouraged some profit-taking in bullion, tempering the recent rally.
Geopolitical uncertainty continues to underlie market sentiment, but the tone of the most recent Federal Open Market Committee (FOMC) Minutes has provided a counterweight in favor of the Dollar. At the same time, a pullback in US bond yields is helping to contain further weakness in gold, preventing a deeper correction for now.
Hawkish Fed Minutes and Inflation Concerns Bolster the Dollar
The minutes from the July 28-29 FOMC meeting showed that policymakers signaled a need to raise interest rates in the near future if progress on inflation proves insufficient. Recent US economic releases indicated only modest month-on-month price increases in July, but inflation is still running above the Federal Reserve’s 2% objective.
Market participants remain uneasy about the potential inflationary impact of higher energy costs linked to the Middle East situation. Concerns that elevated oil prices could re-ignite price pressures are keeping expectations alive for at least one additional Fed rate increase in 2026. This backdrop, together with the US-Iran stalemate, has been lending support to the safe-haven US Dollar and weighing on non-interest-bearing gold.
US-Iran Standoff Sustains Risk Premium
In a fresh escalation, President Donald Trump stated that the United States will pursue “the most crushing economic operation against Iran” and warned of “severe financial penalties on any nation that helps Tehran evade sanctions or does business with Iran.” The ongoing deadlock between the US and Iran over the Strait of Hormuz is keeping a war-risk premium embedded in markets.
However, the downside for US yields has discouraged aggressive Dollar buying. This dynamic argues for caution in calling a near-term top for gold prices or positioning decisively for a sustained corrective move lower.
Treasury Buybacks Spark Move in Long-End Yields and Metals
The US Department of the Treasury moved to ease strain in the bond market, announcing on Wednesday that it will at least double buyback operations for long-dated US government securities starting in September. The news drove the 30-year yield sharply lower from its highest level since June 2007.
TD Securities noted that the “announcement that the US Treasury is increasing the size of liquidity support buyback operations” has “given metals a jolt of life,” with the expanded program underpinning renewed demand for precious metals, including gold.
Data and Fed Speakers in Focus
Attention now shifts to Thursday’s US calendar, which includes the Philly Fed Manufacturing Index and Weekly Initial Jobless Claims. Remarks from key FOMC officials, combined with fresh geopolitical developments, are expected to guide the next moves in the US Dollar and, by extension, the trajectory of gold prices.
Technical Picture: Key Levels for XAU/USD
On the daily chart, XAU/USD has been pushed back from a critical resistance band at $4,510-$4,515. This area merges the 200-day Simple Moving Average (SMA) with the 61.8% Fibonacci retracement of the April-June downswing, suggesting diminishing upside potential in the near term.
The Relative Strength Index (RSI) sits at 65.17, hovering close to overbought territory, while the Moving Average Convergence Divergence (MACD) indicator stays in positive territory, signaling that underlying bullish momentum has not yet fully faded.
| Gold Technical Levels (XAU/USD) | Price | Indicator / Context |
|---|---|---|
| Immediate resistance zone | $4,510 – $4,515 | Confluence of 200-day SMA and 61.8% Fibonacci retracement (April-June decline) |
| First support | $4,404 | 50.0% Fibonacci retracement |
| Secondary support | Near $4,295 | 38.2% Fibonacci retracement |
| Additional support | $4,159 | 23.6% Fibonacci retracement |
| Next upside target | $4,670 | 78.6% Fibonacci retracement |
| Cycle high | Near $4,869 | Potential longer-term target if resistance breaks |
On the downside, initial support is located at the 50.0% retracement level at $4,404. Below that, a more substantial support area is seen around the 38.2% retracement near $4,295, followed by the 23.6% retracement at $4,159, where buyers could attempt to arrest any extended pullback.
On the upside, a decisive break through the $4,510-$4,515 resistance zone would be needed to confirm scope for a continuation of the advance, opening the way toward the 78.6% Fibonacci level at $4,670 and eventually the cycle high close to $4,869.
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