Gold Jumps As Suspected Yen Intervention Crushes US Dollar As Fed Bets Ease

Gold rallies as suspected Yen intervention drives Dollar sharply lower.
Softer US GDP and PCE data ease Fed hike bets.
Warsh’s vague guidance keeps long-end yield premium elevated.

Gold price advances some 0.92% on Thursday after the US Dollar drops following a suspected intervention in the foreign exchange markets, with the Japanese Yen hitting a near two-month high versus the Greenback. The XAU/USD trades at $4,100 after bouncing off the low of the day (LOD) at $4,028.

XAU/USD climbs above $4,100 as Dollar weakness, softer growth and reduced Fed hike odds support Bullion

The Greenback tumbles nearly 0.90% as the US Dollar Index (DXY), which measures the buck’s value against a basket of six currencies, exchanges hands at 99.90. Speculation that Japanese authorities intervened in the FX markets boosted the precious metal to a five-day high of $4,126.

US inflation came as expected, according to the Bureau of Economic Analysis. The Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index in June, ticked lower from 3.4% to 3.3% YoY as expected. The headline PCE slowed from 4.1% to 3.7% YoY, as expected.

Other data showed that the US economy grew more slowly than expected, according to the Commerce Department. The Gross Domestic Product (GDP) for Q2 2026 missed forecasts of 2.1% growth, coming in at 1.5%, due to a widening trade deficit.

Last Wednesday, the Fed held rates unchanged, though the decision was not unanimous. A 9-3 vote split revealed that three Fed Regional Bank Presidents dissented in favour of a 25-basis-point rate hike.

US jobless claims increased below estimates last week, hinting that the labour market remains solid.

Also, the new Fed Chair, Kevin Warsh, emphatically stated that tackling inflation is the priority, though he dodged questions about how the Fed will do its job. The lack of clarity and forward guidance pushed the premium on the US 30-year bond yield to a level last seen in 2007 near 5.21%.

Money markets trimmed their Fed-hawkish bets for September. Instead, the odds of a rate hike are a slim, 30%, while the chances of a hold have risen sharply to 70%, according to Prime Terminal data.

Source: Prime Terminal

However, the resumption of hostilities in the Gulf War could lead to higher energy prices. West Texas Intermediate (WTI), the US Crude benchmark, is down 1% during the day at $83.59, but is up nearly 20% in July so far.

On Friday, the US economic docket will feature University of Michigan Consumer Sentiment.

XAU/USD technical outlook: Gold recovers $4,100, eyes on $4,150

Gold’s price continues to trade sideways, despite registering two days of solid gains, clearing the $4,100 mark. Momentum turned bullish as the Relative Strength Index (RSI) pierced above the 50 neutral level, an indication that buyers are moving in.

For a bullish continuation, buyers must clear the July 22 daily high at $4,165, which would open the path to test the 50-day Simple Moving Average (SMA) at $4,194. Above sits the July 6 peak at $4,202.

Downward, the first XAU/USD support is $4,100. A breach of the latter will expose the July 24 (LOD) at $4,022. This comes ahead of the psychological $4,000 level and then the June 17 daily low at $3,959.