Gold Spot / U.S. Dollar
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Unexpected Drop: Gold Knocked Down by the USD?

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Gold just had an unexpected slide of −8.930 (−0.26%), wiping out more than 89 pips in the blink of an eye! After a series of bullish sessions, the market seemed calm, but this move raises the question: Is this merely a short-term correction, or a setup for a powerful rebound ahead?

In yesterday’s session, gold showed clear weakness as the USD strengthened and risk-on sentiment spread across Asian equities. This combination pulled safe-haven flows away from gold, dragging prices down from resistance and triggering a short-term corrective phase. However, expectations that the Federal Reserve will cut rates in September remain in play, which could act as a strong medium-term support for gold’s next bullish leg.

From a technical perspective, gold is still moving within a descending channel formed earlier this month. Each rebound attempt failed at the trendline resistance, creating a series of lower highs — a classic sign of short-term bearish momentum. Currently, the $3,370/oz zone stands as a key resistance level where price might retest before adjusting lower toward $3,310 – $3,290/oz. Yet, this is also the area where buy-the-dip demand could emerge, potentially fueling a reversal for gold in the sessions ahead.

In summary, XAUUSD in the short term remains biased to the bears, but medium-term bullish momentum is intact. The current declines are likely just technical pullbacks, paving the way for gold to accumulate strength and prepare for a new rebound once the Fed moves closer to cutting rates.
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