Gold under pressure amid robust US economy and Fed uncertainty

Gold (XAUUSD) prices are under pressure as strong U.S. economic data weakens safe-haven demand. Job growth, solid GDP, and sticky inflation point to continued economic strength. These factors have reduced investor appetite for gold. While a softer U.S. Dollar and falling yields offer some support, overall sentiment depends on the Federal Reserve’s next move. Traders remain cautious ahead of key labor market and inflation reports.

Gold weakens as strong U.S. economic data dims safe-haven appeal

The yellow metal is struggling as U.S. data paints a strong economic picture. The ADP Employment Change report showed 104,000 new jobs in July, beating expectations. GDP growth came in at 3% for Q2, far above forecasts. Core PCE also edged higher, signaling sticky inflation. These developments lowered demand for safe-haven assets like gold.

Meanwhile, President Trump’s remarks pushed for lower rates, citing cooling inflation and solid growth. However, the Fed remains cautious. Markets still expect a rate cut by September, with odds nearing 65%. This conflicting sentiment is creating uncertainty for gold’s path.

Yields on the 10-year and 30-year Treasuries are holding firm at 4.33% and 4.86% respectively. Confidence in economic resilience has stabilized yields after recent declines. Gold, which typically moves inversely to yields and the U.S. Dollar, remains under pressure. Investors are now questioning whether the Fed has room to ease policy later this year. This uncertainty has made gold's direction highly dependent on incoming data.

Gold signals bearish shift after triangle pattern breakdown

The gold chart below shows a clear ascending triangle pattern that developed over several months. This bullish formation featured rising lows and a horizontal resistance near $3,440. Gold repeatedly tested the upper boundary but failed to break out. However, the recent breakdown below the ascending trendline marks a bearish technical shift. A red circle and arrow highlight the breakdown point around $3,360. This invalidated the bullish structure and attracted fresh sellers.

The price dropped quickly after breaking the support line, reaching near $3,280. A small bounce followed, but the price remains below the broken trendline. This failed breakout and subsequent decline signals weakness in momentum. Sellers appear to be gaining control, and buying interest has faded at key resistance levels.

Unless gold recovers above $3,360 and reclaims the triangle, the path of least resistance appears to be downward. Traders will watch how the market reacts after the Fed announcement. A dovish surprise could lift prices. But if the Fed pushes back on rate cut expectations, more downside may follow.

Conclusion

Gold is struggling to gain traction amid strong U.S. data and improving risk appetite. Technical breakdown below a key ascending triangle adds to the bearish bias. Although support from a softer U.S. Dollar and declining Treasury yields persists, market sentiment remains highly dependent on the Federal Reserve’s forthcoming guidance. Traders should brace for volatility, with upcoming jobs and inflation data likely to shape gold’s next move.

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