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Gold (XAUUSD) is under pressure as strong U.S. economic data weakens safe-haven demand. July’s robust job growth and a sharp rebound in GDP suggest renewed strength in the U.S. economy. Inflation indicators are also easing steadily, reducing pressure on the Federal Reserve to cut rates soon. Treasury yields remain stable, while the probability of a September rate cut has increased. Investors now look to the Fed’s next move as gold struggles with technical weakness and softer safe-haven demand.
 

U.S. Economic Strength and Easing Inflation Shift Gold Market Outlook

Stronger-than-expected U.S. economic data on Wednesday has reshaped market sentiment. The ADP Employment Change report revealed that the U.S. private sector added 104,000 jobs in July, surpassing expectations of 78,000. This marks a strong rebound from June’s revised 33,000 decline and signals growing strength in the labor market. Despite recent economic concerns, the figures indicate a steady recovery in hiring activity.

In addition, the U.S. economy expanded by 3.0% in Q2 2025, significantly above forecasts and a notable recovery from Q1’s 0.5% contraction. This stronger-than-expected GDP reading supports the Federal Reserve’s cautious approach. It also reduces the immediate need for interest rate cuts. The latest growth figures suggest that the U.S. economy remains stable despite external pressures.

Inflation data continues to show signs of easing. The core PCE Price Index rose 2.5% in Q2, slightly above expectations but down from 3.5% in the previous quarter. Headline PCE inflation dropped to 2.1%, and the GDP Price Index cooled to 2.0%, below the 2.4% forecast. These indicators confirm that inflation is cooling at a consistent pace. Meanwhile, the 10-year Treasury yield remains steady at 4.33%, and the 30-year yield is trading at around 4.86%. Market expectations for a Fed rate cut in September have risen to 65%, but the Fed is widely expected to keep rates unchanged for now. Investors are closely watching for policy signals from the Fed’s post-meeting remarks.
 

Technical Analysis: Gold Breakdown Signals Bearish Trend Ahead

The gold chart below shows a notable shift in price momentum. Gold had been consolidating within an ascending triangle for several months. This is a bullish continuation pattern defined by rising lows and a flat resistance near $3,440. This pattern typically signals the potential for an upward breakout. However, earlier this week, gold broke down from this structure, indicating weakness. A decisive break below the ascending trendline is evident on the chart, triggering a steep decline. A red circle and arrow highlight the failure to sustain above $3,360.
 

(Click on image to enlarge)

The breakdown triggered aggressive selling pressure, driving prices down toward the $3,275–$3,280 zone. As a result, gold is now trading below both the lower boundary of the ascending triangle and the former horizontal resistance. That resistance level has now become a new barrier to further upside. This shift indicates a loss of bullish momentum and a potential change in short-term trend direction. The repeated rejections near the $3,440 level suggest that bulls were unable to maintain control over the market.

Looking ahead, a daily close below $3,280 could pave the way for further downside, targeting $3,200 or even $3,120. Despite the bearish technical signal, macroeconomic fundamentals could still provide support. A dovish tone from the Federal Reserve or disappointing economic data in the coming days might help stabilize the market. However, for bullish momentum to return, buyers need to reclaim the $3,360 level. Until then, the technical outlook remains cautious.
 

Conclusion

Gold continues to face downward pressure as strong U.S. economic data reduces safe-haven demand and weakens bullish momentum. The recent breakdown of a key technical pattern reinforces the bearish outlook. Prices are now struggling to hold above former support levels. While softer yields and a weaker dollar offer some relief, risk appetite and Fed signals will likely dictate the next move. Without a sustained move above the resistance level, the metal remains vulnerable to further declines. 

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