Photo by Dmitry Demidko on Unsplash
 

Gold (XAUUSD) prices trade in a narrow range as traders weigh mixed economic signals and shifting market sentiment. The metal finds support from expectations of a Federal Reserve rate cut and ongoing trade-related uncertainties. However, improved risk appetite, driven by recent trade deals, limits safe-haven demand. At the same time, weak US labour data raises concerns about the economic outlook. Investors now await the US Nonfarm Payrolls (NFP) report for clearer direction.
 

Gold Price Holds Steady Amid Fed Rate Cut Bets and Easing Trade Tensions

The gold market remains influenced by both economic and geopolitical factors. The US Dollar has weakened amid rising expectations of a Federal Reserve rate cut. Many market participants believe the Fed may resume its easing cycle as early as this month, which has kept USD bulls cautious. This outlook has helped limit downside pressure on gold, providing some stability despite broader market uncertainty.

Recent trade developments have also impacted gold prices. A trade agreement between the US and Vietnam has improved market sentiment by reducing tariffs and granting tariff-free access to each other’s markets. This has eased concerns about prolonged trade tensions. However, the safe-haven appeal of gold has been somewhat limited as investors shift their focus to riskier assets in light of the positive trade news.

Meanwhile, trade talks between the US and India continue, though no concrete progress has been made. In contrast, negotiations with Japan remain stalled, keeping some level of trade risk intact. On the economic front, the US labour market shows signs of weakness, with ADP reporting the first decline in private payrolls in over two years. Weak JOLTS data further highlights the softening job market, which may prompt the Fed to cut rates soon. Traders currently see a 25% chance of a July rate cut, with a September cut appearing almost certain. Still, the market awaits the upcoming NFP report before making its next big move.
 

Gold Technical Outlook: Uptrend Support and Wedge Breakout Highlight Bullish Potential                       

The gold chart below shows a significant technical structure that continues to shape market sentiment. A long-standing ascending trendline has supported gold’s uptrend since late 2024. This trendline was recently tested as prices briefly dipped below it. However, buyers quickly stepped in, pushing the price back above the level and maintaining the broader bullish bias.

(Click on image to enlarge)

Another notable formation on the chart is the descending broadening wedge, which developed between April and June. This pattern is typically seen as a bullish continuation signal. Gold broke out of the wedge in mid-June, suggesting potential for further gains. However, the breakout lacked strong follow-through, indicating that momentum remains fragile and dependent on external factors.

Currently, gold is trading just above the ascending trendline, with resistance near the recent high of $3,365. Although a minor pullback occurred, the overall structure remains constructive if the trendline holds. A decisive move above $3,365 would likely confirm bullish momentum. Conversely, a drop below the trendline and $3,320 could attract sellers and shift the market outlook. Traders should closely monitor this area, as upcoming macroeconomic data, especially the NFP report, could trigger significant price movements in either direction.
 

Conclusion

Gold remains in a delicate position ahead of key US jobs data. At the same time, dovish Fed expectations and trade uncertainty provide support, improved risk sentiment and recent trade deals cap gains. Technical analysis shows a bullish structure with a fragile recovery above the trendline. The upcoming NFP report will likely decide the next significant move. Until then, traders may remain cautious, awaiting clarity on the Fed's rate path. 

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