Gold in focus as evolving Fed signals and PMI data drive market direction

Gold (XAUUSD) consolidates within $3,250 and $3,450 as mixed economic data and political developments continue to shape the market outlook. Changing Fed outlooks and growing political tensions continue to fuel market volatility.

Changing Fed outlook and PMI expectations support Gold’s appeal

Gold prices remain sensitive to shifting expectations of the Federal Reserve. The July meeting minutes showed limited support for immediate rate cuts, which gave the US Dollar a short-term lift. However, the data used in that meeting is now outdated. Recent soft labor and inflation data have strengthened expectations for two rate cuts this year. This evolving outlook keeps gold in focus as a safe-haven asset under uncertain monetary conditions.

Political tension is also influencing market behavior. Speculation over Lisa Cook’s resignation from the Fed triggered Dollar weakness and boosted gold. Markets consider this a challenge to the Fed’s independence. Increasing political pressure on policy decisions could drive more interest in gold. Under these conditions, gold continues to act as a strong hedge against monetary and political instability.

Gold price extends uptrend with a series of consolidation breakouts

The gold chart below illustrates a strong and steady uptrend that has been developing since late 2023. Each move in the uptrend has been followed by a period of consolidation, after which it continues higher. These consolidation zones allowed the market to stabilize gains and establish more substantial support. This price behaviour reflects a strong and sustainable bullish trend.

A major consolidation phase developed during the early months of 2024. A breakout from that range sparked a strong upward move. Gold then entered another range in late August, which also ended in a breakout and new highs. Another consolidation phase formed in early 2025 and propelled gold toward the $3,400 level after a successful breakout.

Currently, gold is trading within a narrow range, holding support around $3,260 and facing resistance near $3,500. Despite sideways movement, the structure remains bullish. A series of higher highs and steady lows signal a strong, consistent uptrend. Support near $3,300–$3,320 remains intact, keeping the bullish structure in place. If gold breaks above $3,500 with strong momentum, it could trigger a rally toward $3,700 or more. This move would confirm the continuation of the long-term bullish trend.

Conclusion

Gold continues to hold a bullish structure despite recent market fluctuations. Political tensions and shifting Fed signals continue to support gold’s safe-haven appeal. Technically, the metal holds above key support and maintains a bullish structure. A breakout above $3,500 could unlock fresh upside and confirm the strength of the ongoing uptrend.  

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