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Bullish Momentum Could Strengthen if Gold Breaks the Trendline
Commodity
Economic
Summary:
A decisive break above the descending trendline could open the path toward the next resistance at 3434.
Buy
CLOSEDXAUUSD
End Time
3350.04
Entry Price
3430.00
TP
3290.00
SL
3447.27 +30.40 +0.89%
1001
Points
Profit
3290.00
SL
3360.05
CLOSING
3350.04
Entry Price
3430.00
TP
U.S. President Donald Trump announced on Monday that he had agreed to postpone the implementation of broad tariffs on China for an additional 90 days, just hours before the expiration of the previous agreement between the world’s two largest economies. The move offers temporary relief to global markets, though uncertainties surrounding trade negotiations remain firmly in place.
On Tuesday night, U.S. Treasury Secretary Scott Bessent gave an extensive interview to Fox Business, covering a wide range of domestic and international policy issues. Bessent noted that upcoming U.S. Supreme Court rulings on tariffs could be shaped by the projected revenue such measures would generate. He also underscored that President Trump and Chinese President Xi Jinping maintain a “good relationship” and suggested that the Federal Reserve (Fed) should seriously consider delivering a double rate cut at its September 17 meeting.
According to Bessent, the Fed could have acted sooner—possibly as early as June—if more precise economic data had been available. He emphasized that Trump remains open to appointing a new Fed chair, with the administration aiming to select a candidate capable of “revitalizing” the institution, which he described as facing a “fundamental problem” in its current structure.
Turning to trade, Bessent pointed out that negotiations with India have been met with some resistance, while discussions with China are progressing across several key areas. He reiterated Trump’s strong rapport with President Xi, noting that both sides are expected to meet again in the next two to three months. However, he cautioned that any reduction in Chinese tariffs would likely require months—or even up to a year—of demonstrable progress in curbing fentanyl flows into the United States.
Separately, Kansas City Fed President Jeffrey Schmid stated on Tuesday that the modest inflationary impact of tariffs should be viewed as evidence that monetary policy remains “appropriately calibrated,” rather than as grounds for immediate rate cuts.
Fresh data from the U.S. Bureau of Labor Statistics showed that the headline Consumer Price Index (CPI) rose 0.2% month-over-month in July, matching expectations and easing from June’s 0.3% gain. On an annual basis, headline inflation held steady at 2.7%, just under the 2.8% consensus forecast. Core CPI, which excludes volatile food and energy prices, rose 0.3% m/m and 3.1% y/y, both exceeding market expectations. While the stronger core reading tempered the dovish narrative somewhat, investor focus largely shifted to the softer headline data and the broader disinflationary trend.
Following the CPI release, CME’s FedWatch tool indicated a 94% probability of a 25-basis-point rate cut in September, up from 84% before the data.
Technical Analysis
XAUUSD recently found support near the convergence of the 100-period and 200-period moving averages on the four-hour chart, located at 3357 and 3343 respectively. If this area continues to hold firmly, there is potential for a renewed bullish move, as the broader trend remains upward. A decisive break above the descending trendline could open the path toward the next resistance at 3434.
The Relative Strength Index (RSI) recently touched 38, approaching oversold territory—an area that could attract fresh buying interest from bulls. However, if the 200-period moving average is breached to the downside, the price could target the next support level near 3311. This zone might also provide new long opportunities, though the potential for interest rate cuts could draw market attention to other risk assets before gold, particularly if gold begins to underperform relative to equities or higher-yielding instruments.
Trading Recommendations
Trading direction: Buy
Entry price: 3351
Target price: 3430
Stop loss: 3290
Validity: Aug 22, 2025 15:00:00
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