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Gold ended last week 1% better off after Fed Chair Jerome Powell signalled on Friday that rate cuts could arrive as soon as September. After a brief pause on Monday, the yellow metal has pushed a little higher again, helped by political nerves in both the US and Europe. While equities have been unsettled a little by these developments, gold has quietly held firm – a sign that investors are willing to keep leaning bullish, even if the market is still caught in consolidation mode. It is worth watching the US dollar this week, as we will have more data to look forward. If the Fed edges further towards easing while political turmoil continues to gnaw at confidence in US policymaking, the dollar is likely to remain under pressure – an environment that typically favours gold. The main caveat to the current bullish gold trend is if investor continue to pour money into the racier stock market, which could keep the appetite for haven demand low. 

Fed Independence Questioned: Cook’s Removal

Markets were rattled in Asian trade when news broke that President Trump had dismissed Fed Governor Lisa Cook over alleged mortgage irregularities. Cook disputes his authority to fire her, meaning the courts will now decide whether she stays, or the Fed is left one member short. With Adriana Kugler having recently resigned and Stephen Miran brought in, the balance of the board already tilts more towards Trump’s stance. That raises concerns over Fed independence – a narrative investors dislike. For the dollar, this is a clear negative; for the price of gold, it’s another supportive tailwind. But is it enough to trigger a breakout above the key $3,400 resistance remains to be seen. 

Key Events: Data and Fed Speak

This week’s calendar could also shape gold’s direction:

• Consumer confidence (today): Gauges whether household sentiment is sliding further.
• Q2 GDP revision (Thursday): Unlikely to shock markets unless the downward revision is significant.
• Fed Governor Christopher Waller’s speech (Thursday): One to watch, given he supported July’s cut and is a frontrunner to succeed Powell. Any dovish shift would carry weight.
• Core PCE inflation (Friday): The Fed’s preferred inflation measure, crucial for September’s policy call and therefore the direction for US dollar, and in turn, gold. 

These releases should keep gold traders busy. A softer data run or dovish rhetoric would only deepen pressure on the US dollar index, reinforcing the bullish gold story.

Technical analysis and key levels to watch

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From a chart perspective, gold has been consolidating for several weeks, winding up inside a wide range. The bulls may be frustrated by the lack of any further follow-through despite the renewed dollar weakness. But technically this type of price action often precedes a break out in the prevailing direction. Still, it is better to wait for more confirmation. For me, that would be in the form of a daily close above the bearish trend line that has been in place since gold topped in April. If this happens and ideally, we hold above $3,400 level, then this could pave the way for a potential continuation to re-test April’s ATH of $3,500 level.Interim resistance comes in at $3,385.

On the downside, $3,350 is now the first level of support to watch, below which there is not much further support seen until $3,300, and then the June low of 3,247 will come into focus next. 

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