Gold eyes $3,500 resistance as inflation slows and Treasury yields fall

Gold (XAUUSD) prices increased on Wednesday, supported by softer US inflation data and rising expectations of a Fed rate cut in September. The price increased above $3,370 as May's CPI came in at 2.4% year-over-year, below the 2.5% forecast. This triggered a surge in Bullion prices. Weakness in the US Dollar and falling Treasury yields further supported gold. The Dollar Index dropped to 98.40, while the 10-year yield fell to 4.42%, boosting non-yielding assets like gold.

Uncertainty in global trade talks also helps keep gold prices elevated. Despite claims of progress between the US and China, final approval from both leaders remains pending. Investors are watching for further developments, especially as tensions rise with Iran. Comments from President Trump and Iran’s Foreign Minister suggest continued geopolitical risk, which supports the demand for safe havens. Meanwhile, traders await upcoming PPI and jobs data for more clues on inflation. With money markets pricing in 47.5 basis points of easing by year-end, gold remains well-positioned in the current macro environment.

Gold technical outlook: Bullish trend holds in ascending channel

The gold chart below shows a well-defined ascending channel that extends from late 2023 to mid-2025. The price has respected both the upper and lower bounds of this channel. This confirms a strong bullish trend. The midline of the channel also served as a pivot point for support and resistance throughout this period, validating its technical relevance.

Currently, gold is trading near the upper half of the channel. It has pulled back slightly after hitting resistance around the $3,400 level. The top of the channel lies near the $3,500 mark, which represents the next significant level of resistance.

This area may be retested if bullish momentum persists. The recent candles suggest consolidation but without significant bearish rejection. Support can be seen near $3,200, aligned with the channel’s lower half.

The breakout above $3,300 marked a key bullish signal. As long as gold stays within this channel, the trend remains upward. A decisive break below the lower channel line would shift the technical bias.

For now, gold maintains structure within the bullish channel. The price action is steady and favors a slow grind higher, mainly if supported by dovish Fed commentary or weak inflation data.

Conclusion

Gold remains poised for further gains as trade tensions, geopolitical risks, and dovish monetary expectations drive safe-haven demand. The bullish technical structure supports this outlook, with price action holding firm within a rising channel. Investors continue to seek clarity from the Federal Reserve, but until then, uncertainty favors gold. Strong momentum and key support levels add to the metal’s resilience. Unless key technical levels break, the trend points upward.

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