Gold Bulls Regain Control as US Economic Data Deteriorates

Traders' Opinions

Summary:

Gold continues to consolidate above key support following its strong rally. Holding above $4,350 keeps the bullish structure intact, with $4,550 the next major upside target.

BUY XAUUSD

EXP

TRADING

4394.98

Entry Price

4550.00

4250.00

4385.64 +8.98 +0.21%

0.0

Pips

Flat

4250.00

Exit Price

4394.98

Entry Price

4550.00

Gold extends its recovery for a second consecutive session, trading around $4,400 as weaker US economic data weighs on the Dollar and reduces expectations for an immediate Federal Reserve rate hike.

US Retail Sales fell 0.6% in July, while the University of Michigan Consumer Sentiment Index dropped to 51 from 55.2. Combined with softer inflation and employment indicators, the data suggest the US economy is losing momentum and give the Fed more reason to remain patient.

BNY strategists noted that recent weakness in US data has reduced expectations for further tightening in 2026, adding that continued progress on inflation could reinforce the view that the Fed's hiking cycle is effectively over.

However, the outlook remains complicated by elevated Oil prices and Middle East tensions. Continued disruption around the Strait of Hormuz could keep energy costs high and revive inflation concerns, while escalating US-Iran tensions maintain safe-haven demand for both Gold and the Dollar.

Gold retains a bullish underlying bias, supported by a weaker Dollar, softer US data and geopolitical uncertainty. However, lingering expectations for another Fed hike could slow the move higher. Attention now turns to Wednesday's FOMC Minutes for fresh clues on the policy outlook.

Technical Analysis

Gold’s recent price action suggests the market is catching its breath rather than losing momentum. After the aggressive advance from the $4,050 region, XAU/USD has settled around $4,400, where buyers and sellers are battling for control before the next directional move.

The $4,350–$4,380 region has become an important near-term floor. Buyers have responded strongly whenever price has approached this area, including the latest dip toward $4,320. That reaction suggests demand remains healthy and supports my view that the current movement is a bullish consolidation following the previous impulse higher.

Attention now shifts toward $4,420–$4,440, where Gold has struggled to generate sustained follow-through. Breaking through this ceiling would provide the confirmation bulls are looking for and could quickly bring the $4,550–$4,565 region into play.

If buyers successfully clear $4,565, there is relatively more room for the rally to extend toward $4,600–$4,620, before attention turns to the much stronger resistance around $4,775–$4,800. In a stronger continuation scenario, $4,865 remains the broader upside objective.

The bullish outlook would begin to lose strength if Gold falls decisively beneath $4,350. Such a move could trigger another test of $4,320, while failure there would expose the larger $4,175–$4,200 demand area.

For now, I continue to favour the upside. The market is building a platform around $4,400 after a powerful advance, and unless sellers force a sustained break through support, I expect dips to remain attractive to buyers ahead of another attempt at $4,440 and ultimately $4,550.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4390

STOP LOSS: 4250

TAKE PROFIT: 4550

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Gold Bulls Regain Control as US Economic Data Deteriorates

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