Gold Prices Recover After Sharp Decline
Gold prices (XAU/USD) staged a strong rebound on Wednesday, climbing back toward $3,345 per ounce during the American trading session after dipping to a three-week low of $3,311 earlier in Asian trade. The recovery was supported by a weaker US Dollar, easing Treasury yields, and cautious optimism in global markets.
After Tuesday’s heavy selloff, gold steadied below the critical $3,350 resistance level, with investors closely watching the Federal Reserve’s July meeting minutes for fresh signals on monetary policy.
Why Gold Prices Bounced Back
Several factors contributed to the rebound in gold prices:
- US Dollar retreats after hitting a one-week high.
- US Treasury yields ease, lowering the opportunity cost of holding gold.
- Improving market sentiment following high-level diplomatic talks in Washington.
- Ongoing geopolitical risks continue to support safe-haven demand.
US Dollar Weakens, Supporting Gold
The US Dollar Index (DXY), which measures the greenback against a basket of major currencies, slipped to 98.12 after touching a one-week high of 98.44. The decline came as political tensions mounted, with President Donald Trump calling for Fed Governor Lisa Cook’s resignation over a mortgage controversy, increasing pressure on the central bank.
A weaker dollar typically benefits gold, making the precious metal cheaper for foreign buyers and boosting demand in global markets.
US Treasury Yields Decline
Bond markets also provided support to gold prices. The 10-year Treasury yield dipped to 4.296%, while the 30-year yield held near 4.891%. Meanwhile, the 10-year TIPS yield (a proxy for real interest rates) slipped from 1.989% to 1.939%.
Falling real yields reduce the opportunity cost of holding non-yielding assets like gold, thereby attracting more investor interest.
White House Summit Boosts Diplomatic Hopes
A high-profile summit at the White House involving President Trump, Ukrainian President Volodymyr Zelenskyy, and top EU leaders improved market sentiment. The discussions raised hopes of a diplomatic breakthrough in the Russia-Ukraine conflict.
Trump hinted at the possibility of a trilateral summit with Russian President Vladimir Putin, though Moscow signaled that such talks would require gradual preparation. While no timeline is set, the renewed engagement has temporarily boosted risk appetite in global markets.
However, geopolitical uncertainty continues to linger, ensuring that gold retains some safe-haven appeal.
Trade Tensions: US Expands Tariffs
On the trade front, the US government announced that 50% tariffs on steel and aluminum have been expanded to cover an additional 407 product categories, including auto parts, chemicals, plastics, and furniture components.
Commerce Department official Jeffrey Kessler stated that the new measures aim to close loopholes and prevent circumvention of tariffs, strengthening American industry.
Meanwhile, Treasury Secretary Scott Bessent revealed that Washington has held “very good talks” with China on tariffs, hinting at continued negotiations during the current 90-day pause in tariff implementation.
Trump’s Comments on Ukraine and the Fed
President Trump signaled that the US might provide security guarantees to Ukraine, especially through air support, but ruled out sending troops. He also stressed the need for both Putin and Zelenskyy to show flexibility for a peaceful settlement.
On the domestic front, Trump renewed his criticism of the Federal Reserve, accusing Chair Jerome Powell of “hurting the housing industry” by keeping interest rates too high. His remarks came just days ahead of Powell’s much-anticipated Jackson Hole Symposium speech, where markets expect new clues on the Fed’s rate outlook.
Markets Await FOMC Minutes
The FOMC July meeting minutes, set for release later in the day, remain the key event for traders. With two dissenting votes favoring a rate cut, analysts expect the minutes to reveal deeper divisions within the Fed.
A dovish tilt could strengthen gold’s momentum, while hawkish commentary might limit gains.
Technical Analysis: Gold Price Outlook
From a technical perspective, gold has rebounded strongly after testing the $3,311 support zone, its lowest level in three weeks. The metal is now trading near $3,345, with immediate resistance at $3,350.
- Resistance levels: $3,350 and $3,370.
- Support levels: $3,330 and $3,311.
If gold breaks above $3,350, it could open the door to a move toward $3,370–$3,400. On the downside, a close below $3,330 would put the $3,311 low back into focus.
Key Takeaways
- Gold (XAU/USD) rebounds from a three-week low near $3,311.
- Recovery fueled by a weaker US Dollar and lower Treasury yields.
- White House summit lifts risk sentiment, but geopolitical risks linger.
- US tariffs expanded to 407 more product categories, adding trade uncertainty.
- Trump pressures the Fed for aggressive rate cuts ahead of Jackson Hole.
- Traders await FOMC minutes for clues on the central bank’s next move.
