Weaker Dollar Supports Gold Price Ahead of Powell’s Jackson Hole Speech
LONDON (August 19) Gold edged higher in Tuesday trading but continues to hover below key technical levels, with the market awaiting cues from this week’s Federal Reserve communications. The yellow metal is trading under both the 50-day moving average at $3349.70 and the short-term pivot at $3353.58. A breakout above this pivot could signal a shift in sentiment, targeting resistance at $3374.81, and potentially extending to the $3409.43–$3451.53 zone.
Weaker Dollar Offers Near-Term Support for Gold
Gold’s modest gains come on the back of a 0.1% drop in the U.S. dollar index, offering near-term relief for the metal by improving its appeal for non-dollar buyers. Treasury yields remain mostly flat, with the 10-year note yielding 4.324%, and the 2-year slipping to 3.761%. Lower yields often reduce the opportunity cost of holding non-yielding assets like gold, offering further price support.
Fed Meeting Minutes and Powell’s Speech in Focus
The market is heavily focused on the upcoming release of the Federal Reserve’s July meeting minutes and Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium, running August 21–23. These events are expected to offer insight into the Fed’s inflation and employment outlook, which will likely shape rate expectations heading into September. The CME FedWatch tool shows an 83% probability of a 25-basis-point rate cut next month, a sentiment gold bulls will be watching closely.
Geopolitical Risk Remains a Backdrop Driver
U.S. political developments are also offering a potential tailwind. President Trump’s recent commitment to back Ukraine in a possible peace deal with Russia, following separate meetings with Zelenskiy and Putin, adds a layer of geopolitical risk that could support gold as a safe haven. However, the lack of immediate clarity on U.S. commitments limits any strong market reaction for now.
Gold Prices Forecast: Bullish Bias Holding, But Resistance Looms
Despite today’s modest gains, gold remains vulnerable unless it reclaims and sustains above the $3353.58 pivot. Failure to break above this level could see sellers target support at $3310.48. If that breaks, deeper selling may test the July 30 low at $3268.12.
However, the combination of a soft dollar, stable-to-lower yields, and dovish expectations from the Fed tilt the near-term outlook cautiously bullish, provided technical resistance levels are cleared.
Gold prices projections hinge on Powell’s tone Friday—any confirmation of policy easing could be the catalyst for a sustained move higher.
FXEmpire
