Why Is Gold Losing Its Shine? FOMC Minutes Hold the Key | XAU/USD Analysis & Market Outlook

Gold's Retreat From Record Highs: What's Driving the Pullback?official elon coin

The precious metal's recent dip follows Monday's all-time peak, with XAU/USD showing modest declines during Wednesday's Asian trading session. Federal Reserve officials continue emphasizing the need for sustained evidence of cooling inflation before considering rate cuts, creating headwinds for non-yielding assets.

Fed Rhetoric Weighs on Bullion

Multiple Fed governors have recently reinforced the central bank's cautious stance. Christopher Waller noted requiring convincing data before supporting cuts, while Raphael Bostic stressed patience with the first rate adjustment. These comments strengthen the dollar, applying pressure to dollar-denominated gold prices.

Counterbalancing Factors Supporting Gold

Despite Fed-related pressures, several factors may limit gold's downside:

• Ongoing US-China trade tensions
• Persistent Middle East geopolitical risks
• Strong central bank purchasing activity
• Robust Asian physical demand

Technical Perspective: Bullish Structure Remains Intact

The four-hour chart reveals an ascending trend channel formation since early May, with price holding above the critical 100-period EMA. The RSI hovering near 63 maintains its bullish configuration, suggesting potential for further upside.

Key Levels to Watch

Upside Targets:

• Record high at $2,450
• Channel resistance near $2,465
• Psychological $2,500 barrier

Support Zones:

• $2,400-$2,405 (channel support)
• May 10 high at $2,378
• 100-EMA at $2,364

Market Moving Events Ahead

Traders await the FOMC Minutes release and scheduled remarks from Chicago Fed President Goolsbee for additional policy clues. The CME FedWatch Tool currently prices in potential September rate cuts, with two quarter-point reductions anticipated by year-end.

Currency Crosscurrents

The US dollar shows mixed performance against major counterparts, strongest versus the Japanese yen but weaker against commodity-linked currencies. These currency fluctuations continue influencing gold's valuation dynamics.