Peter Smith
Short sellers are piling into gold around the $3,400 mark, putting the squeeze on bulls as the dollar bounces back and everyone waits for Tuesday's inflation numbers.
Gold (XAU) Gets Hammered Below Key $3,400 Level
Gold's having a rough time lately, with bears pushing it down from that crucial $3,400 psychological level. The stronger dollar isn't helping matters, and with risk appetite picking up, investors are looking elsewhere for their thrills.
But here's the thing - gold might catch a break from all the chatter about Fed rate cuts coming in September. Fed Governor Michelle Bowman dropped some pretty dovish hints on Saturday, saying those weak job numbers have her thinking three rate cuts in 2025 might be just what the doctor ordered.
Right now, traders are betting there's an 89% chance we'll see a rate cut in September, with at least two more cuts before the year wraps up. That's music to gold bulls' ears, even if the metal is getting knocked around in the short term.
XAU Price Prediction: The Fed Put Keeps Gold Dreams Alive
Despite all the doom and gloom, gold's been on quite the tear recently. We're talking about a 3.8% jump in the month leading up to early August 2025, and get this - a whopping 43% gain year-over-year. Not too shabby for a "barbarous relic," right?
The yellow metal's getting some love from nervous investors worried about trade wars and tariff tantrums. When things get messy in the markets, people still flock to gold like it's 1979. And why wouldn't they? It's been holding value for centuries and isn't going anywhere anytime soon.
What's Next for Gold (XAU) Prices?
The real test comes with Tuesday's inflation data. If those numbers come in hot, all bets are off for those September rate cut hopes. But if inflation keeps cooling down, gold could be sitting pretty for the rest of the year.
Peter Smith
