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Could Gold Repeat Its Bullish Rebound from Support?
Central Bank
Commodity
Summary:
A strong bullish reaction from that level could initiate a fresh upward leg, continuing the broader bullish trend.
Buy
PENDINGXAUUSD
EXP
3270.00
Entry Price
3390.00
TP
3230.00
SL
3290.95 +16.01 +0.49%
--
Point
PENDING
3230.00
SL
CLOSING
3270.00
Entry Price
3390.00
TP
U.S. Federal Reserve Chair Jerome Powell made it clear on Wednesday that the central bank will not take government financing needs into account when determining interest rate policy. During the press conference following the latest Federal Open Market Committee (FOMC) meeting, Powell emphasized that the Fed’s sole responsibility is fulfilling its dual mandate from Congress—maintaining price stability and supporting a strong labor market.
Under this legal obligation, Powell stressed, “We don't consider the fiscal needs of the federal government. No central bank in an advanced economy does that, and it would not be appropriate for us to do so.” He added that factoring in fiscal pressures would compromise the Fed’s credibility and its independence in pursuing monetary policy objectives.
Economists widely agree that any central bank that prioritizes keeping government borrowing costs low, rather than controlling inflation, risks losing its ability to act independently and effectively. Such a shift would likely erode confidence in the institution and undermine its capacity to anchor inflation expectations.
Powell’s remarks came after the Fed decided to keep its benchmark interest rate unchanged in a target range of 4.25% to 4.50%. Policymakers continue to assess how recent shifts in government trade policies and tax structures are influencing economic performance, as markets increasingly anticipate a potential rate cut in September.
On the macroeconomic front, the U.S. economy posted a strong rebound in the second quarter of 2025, growing at an annualized pace of 3%, after contracting by 0.5% in Q1. The result exceeded expectations of a 2.4% expansion, signaling renewed momentum.
Meanwhile, the preliminary Core Personal Consumption Expenditures (PCE) Price Index rose 2.5% from the previous quarter, slightly above the projected 2.4%, though still lower than the 3.5% recorded in Q1. The broader PCE inflation measure declined to 2.1% from 3.7%, and the GDP Price Index eased to 2.0%, below the estimated 2.4%, suggesting continued disinflationary trends.
Labor market data also surprised to the upside. The ADP employment report for July revealed that the U.S. private sector added 104,000 jobs, well above expectations of 78,000 and a sharp rebound from June’s revised decline of 33,000.
In bond markets, the U.S. 10-year Treasury yield held near 4.33% on Wednesday, consolidating after a steep drop in the prior session. The 30-year yield (US30Y) hovered around 4.86%, as investors turned cautious ahead of the Fed’s policy statement.
Technical Analysis
XAUUSD dipped intraday, briefly touching a low near $3,270, approaching the 200-period moving average on the 12-hour chart, currently sitting at $3,264. The 100-period moving average remains higher at $3,342. If gold manages to rebound from this zone, which has previously triggered two significant upward moves, a similar bullish reaction could emerge. Should this support level hold, the price may aim for the next resistance near $3,393.
The RSI has dropped to 35.3, rapidly approaching oversold territory but not quite there yet. This suggests there could be room for one final downward leg to test the 200-period MA. A strong bullish reaction from that level could initiate a fresh upward leg, continuing the broader bullish trend. However, a decisive break below the support would likely lead to deeper losses for XAUUSD.
Trading Recommendations
Trading direction: Buy
Entry price: 3270
Target price: 3390
Stop loss: 3230
Validity: Aug 08, 2025 15:00:00
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