Gold Price at $3,335 Faces Fed Policy Crossroads and Inflation Pressure

XAU/USD Consolidates as Inflation Data and Fed Signals Weigh on Momentum

Gold (XAU/USD) closed the week at $3,335.70 per ounce, down 1.83% or $62.07, after U.S. producer prices surged 0.9% month-over-month — the hottest PPI print in three years. That spike in wholesale inflation rattled expectations of an aggressive Fed rate cut in September, with futures markets trimming bets for a 50bp move and now largely pricing only a 25bp reduction. While gold pulled back, it held firm above a critical pivot at $3,310.48, the midpoint retracement of the $3,500.20–$3,120.76 range, which continues to act as a key support zone.

Fed Policy, Inflation Pressure, and Jackson Hole as a Decisive Catalyst

The sharp rise in producer prices comes alongside stronger-than-expected U.S. jobless claims, giving Fed policymakers cover to remain cautious. Treasury yields steadied into the weekend, and the Dollar Index (DXY) softened slightly, but neither provided enough tailwinds for bullion to regain lost ground. The spotlight now turns to Jerome Powell’s address at Jackson Hole on August 22. Should Powell strike a dovish tone emphasizing growth risks, gold could break higher toward $3,439–$3,451 resistance levels. A hawkish reaffirmation of inflation control, however, risks sending XAU/USD beneath $3,310.48, exposing targets at $3,268.12, $3,244.41, and deeper support at $3,120.76.

Global Debt Pressures and Currency Devaluation Support Long-Term Gold Demand

Beyond near-term technicals, structural forces remain highly supportive. Global sovereign debt has ballooned, with U.S. government obligations rising alongside deficits in Europe, the U.K., and Canada. With core U.S. CPI still at 3.1% annually, real purchasing power erosion is evident across major economies. Analysts emphasize that central banks are trapped: raising rates further risks crippling debt servicing costs, while cutting too aggressively could accelerate inflation. This environment keeps financial repression and potential yield curve control in play — both historically bullish for gold. It is no coincidence that gold has broken above ¥18 million in JPY terms, notched fresh records against the British pound, Canadian dollar, and euro, and sits within striking distance of highs versus the Swiss franc.

Technical Setup: Symmetrical Triangle Suggests Imminent Breakout

From a technical perspective, gold is compressing within a symmetrical triangle. Resistance sits near $3,405, while support holds at $3,330. Candlestick structure is showing small-bodied indecisive bars with long wicks, signaling hesitation but also pressure building for a decisive move. Momentum remains neutral, with RSI at 41 — not oversold, but lacking strength — and MACD still negative, though histogram bars are shrinking, hinting at waning selling momentum. Immediate levels to watch are $3,348 on the upside and $3,329 on the downside. A confirmed breakout above resistance could quickly ignite a rally to $3,374–$3,405, while a failure of support could send prices to $3,288.

Macro Crosscurrents: Trade Policy, Geopolitics, and ETF Flows

Geopolitical dynamics continue to complicate bullion’s outlook. Reports of potential U.S. tariffs on Swiss gold triggered a brief price spike last week before being dismissed by the White House. Meanwhile, progress in U.S.-Russia talks on Ukraine temporarily weighed on safe-haven flows, though no breakthrough was reached. On the trade front, Washington and Beijing agreed to extend negotiations for another 90 days, easing immediate risks but also capping urgent demand for defensive assets like gold. At the same time, physical buying in Asia has slowed as prices hover above $3,300, although ETF inflows remain steady, with global holdings stabilizing around $150 billion in assets under management.

Regional Data Watch: PMI, Housing, and Central Bank Speeches

The week ahead brings a slate of global macro data with potential to jolt XAU/USD. Traders will dissect U.S. housing starts, UK and Eurozone CPI, and provisional PMI releases. Beyond Powell at Jackson Hole, the ECB’s Christine Lagarde is also scheduled to speak, adding another layer of central bank signaling into the mix. These cross-currents suggest volatility is likely to intensify, particularly given the triangular technical compression. Analysts note that a macro trigger — whether a dovish pivot or another inflation surprise — will be necessary to unlock the next leg.

Market Sentiment: Gold Relative to Other Assets

Gold’s weekly decline contrasts sharply with Bitcoin’s resilience, which has consolidated around $118,000 despite similar macro headwinds. Silver also slipped, falling under $38 per ounce after peaking at $38.70 earlier in the week. This divergence underscores how inflation-sensitive assets remain vulnerable to U.S. data surprises. Yet, the broader safe-haven narrative is far from broken. With Moody’s downgrading U.S. bonds and Treasury Secretary Bessent hinting at deeper cuts, bullion’s role as a hedge remains intact.

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