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Gold (XAUUSD) prices face renewed pressure as the US Dollar regains strength. Strong US economic data has shifted market expectations. Easing expectations around early rate cuts has boosted the Dollar, putting renewed pressure on gold. Weakness in equities and rising concerns over AI-led gains add to the Dollar’s safe-haven appeal. Markets are closely watching Jerome Powell’s remarks at Jackson Hole, which could determine gold’s next major move.

Stronger US Data Fuels Dollar Strength, Keeps Gold Under Pressure

The US Dollar has regained momentum, supported by better-than-expected performance in core economic sectors. US housing data exceeded expectations. Existing Home Sales for July rose to 4.01 million, compared to the 3.92 million forecast. This marked a 2.0% monthly increase, reversing the 2.7% decline in June. Business activity also showed surprising strength. The S&P Global Composite PMI for August climbed to 55.4, the highest level in eight months. Manufacturing and Services PMIs came in above expectations, recording 53.3 and 55.4, respectively. Such readings indicate continued economic stability.

This positive data has reshaped market expectations around monetary policy. Expectations for a September rate cut have started to fade. Based on the CME FedWatch Tool, probabilities have slipped to 75%, compared to 85% before the data was published. This change has strengthened the US Dollar, putting additional pressure on Gold. Being a non-yielding asset, Gold is less attractive during periods of higher interest rate expectations.

Further weighing on Gold is the recent weakness in US equity markets. Concerns are growing over the long-term sustainability of AI-fueled market gains. As a result, risk sentiment has weakened, boosting the Dollar’s safe-haven appeal. Funds are shifting toward the US Dollar, pulling demand away from Gold. Now, all eyes are on Jerome Powell’s upcoming speech at the Jackson Hole Symposium. The Wall Street Journal’s Nick Timiraos has suggested that Powell might reverse key 2020-era policies. This refers to policies such as flexible inflation targeting and a strong focus on employment. A more hawkish stance may reduce expectations for rate cuts, boosting the Dollar and pressuring Gold. Any indication of policy easing could fuel a sharp rally in Gold.

Gold Remains Range-Bound with Repeating Consolidation Patterns Signaling Upside

The gold chart below shows a consistent pattern, with prices moving through a series of consolidation phases followed by breakouts. These periods of sideways movement have acted as launchpads, allowing gold to gather momentum before surging higher. This recurring behavior highlights the strength of the underlying bullish trend.

(Click on image to enlarge)

Currently, gold is exhibiting the same technical setup. It is trading in a horizontal range just below the $3,500 mark, following a strong rally from the $3,000 zone. This mirrors previous setups seen in 2024 and early 2025. During those periods, price consolidated, built strength, and then broke out decisively to the upside. The similarity suggests that the market may be preparing for another decisive move.

Now, the price is holding between approximately $3,200 and $3,500. A breakout above this upper boundary could lead to new highs and attract fresh buying interest. However, if Jerome Powell’s upcoming speech boosts the Dollar, Gold could drop below $3,200 and test lower support levels. The technical setup aligns with ongoing macroeconomic uncertainty. Powell’s upcoming remarks could serve as a key market trigger.

Conclusion

Gold holds steady within a narrow range as markets brace for Powell’s speech. Strong US economic data has strengthened the Dollar and reduced expectations for imminent rate cuts, putting Gold under pressure. However, the chart shows a typical consolidation phase, suggesting a breakout could be near. Whether Gold breaks higher or slips lower may depend on the Fed Chair’s remarks. Stronger policy language could weigh on gold and support the Dollar, whereas a softer stance may boost gold significantly.

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