Saad Ullah
Gold's chilling around $3,385 on Wednesday, and honestly, it makes sense. You've got Middle East drama on one side and everyone waiting to see what the Fed's gonna do on the other. The metal's holding above $3,380 while traders sit tight for Powell's next move.
Trump's Middle East Comments Keep Gold (XAU) Attractive
Trump cut his G7 trip short to rush back for national security talks about Israel-Iran. That's never a good sign for market nerves. The Wall Street Journal says military action was discussed, but no final decisions yet.
Then Trump posts on Truth Social: "We now have complete and total control of the skies over Iran," demanding "unconditional surrender" and saying he wants a "real end" to Iran's nuclear program. When leaders start talking like that, people run to gold pretty fast.
Fed Decision Could Make or Break Gold (XAU)
The CME FedWatch Tool shows most folks expect rates to stay put at 4.25%-4.50% for now, but there's a 58% shot at a September cut. The real action will come from Powell's tone - dovish talk could sink the dollar and boost gold, while hawkish comments might do the opposite.
Central banks aren't messing around either. They've been buying over 1,000 tonnes of gold annually for three straight years - double what they used to buy, according to the World Gold Council.
Gold (XAU) Technical Setup: Watching $3,400
From a chart perspective, gold's basically camping out just below that big round $3,400 number that everyone's watching. It's holding its ground around $3,380 with some decent support at $3,371 (that's the 23.6% Fibonacci level for you nerds out there). The 20-day moving average is sitting at $3,346, acting like a safety net.
If gold can finally break through $3,400 and actually stick there, we're probably looking at a run toward $3,440-$3,452. That area has been acting like kryptonite for gold bulls over the past few days - every time it gets up there, sellers come out of the woodwork.
But if things go sideways and we drop below $3,371, then we're probably heading toward $3,360 next. After that, there's this whole cluster of support around $3,320-$3,308 where the 50-day moving average hangs out with some other technical levels. If that breaks, things could get ugly fast.
The RSI is chilling around 56, which means there's still room to run higher if Powell gives us what we want to hear. But if he comes out swinging like he's trying to fight inflation with his bare hands, gold might need to take a timeout and figure out its next move.
Saad Ullah
