Gold rebounds after touching $3,250

30 Haziran 2025

Gold rebounds after touching $3,250 amid geopolitical calm and Fed hints: How will prices move as markets bet on interest rate cuts?

Written by: Rania Gule, Senior Market Analyst at XS.com – MENA

Gold prices witnessed a notable rise at the start of today’s European trading session on Monday, trading at $3,293, supported by a combination of economic and geopolitical factors that have refocused attention on the yellow metal as one of the most sensitive indicators of market volatility. From my perspective, this rise is not merely a temporary corrective move but reflects a gradual shift in the balance of power between the US dollar and gold, driven by increasing expectations of an imminent change in the Federal Reserve’s interest rate policy, in addition to signals from global markets suggesting a shift in investor risk appetite.

At the core of this bullish trend for gold are two main factors: optimism surrounding the possibility of reaching trade deals between the United States and several of its strategic partners, and growing expectations that the Federal Reserve will begin a rate-cutting cycle sooner than anticipated. Recent data showing a decline in personal spending and income in the US in May support the view that the American economy has started to show tangible signs of slowing down, which could prompt monetary policymakers to act proactively through easing measures. Should this scenario materialise, the dollar would be vulnerable to weakness, naturally supporting gold prices as a dollar-denominated commodity.

Furthermore, gold’s recovery of some losses during the early European hours reflects this changing market sentiment, where signs of weakness in US economic data are interpreted as a strong justification for dollar depreciation, pushing investors toward real assets. With markets eagerly awaiting an upcoming speech from Federal Reserve members, led by Raphael Bostic and Austan Goolsbee, the tone of this speech will be decisive in confirming or denying this potential shift in monetary policy. Any hint of the Fed’s intention to move toward cutting interest rates, even gradually, will bolster gold’s strength toward further short-term gains.

On the other hand, it cannot be overlooked that a large part of gold’s appeal traditionally rests on its role as a haven in times of crisis. Accordingly, the relative improvement in geopolitical conditions — especially after the announcement of a ceasefire agreement in the Middle East and news of imminent US trade agreements — reduces the global anxiety factor and thus limits investors’ flight to gold driven by “fear.” Therefore, I see that the easing of geopolitical escalation has allowed investors to take some profits, with declining concerns over a wide-scale military escalation, whether in the Middle East or Asia.

Nevertheless, I find an interesting paradox in this scenario: while improving geopolitical sentiment is expected to pressure gold, the same positive developments in trade and international politics fuel expectations of rate cuts, which benefit gold from another angle. This overlap reflects that today gold moves not only as a safe-haven asset but also as a sensitive indicator of monetary policies and inflationary pressures.

Speaking of inflationary pressures, the Personal Consumption Expenditures (PCE) price index data released last Friday confirms that inflation continues to slow down, albeit modestly, with the core index rising by 2.7% year-on-year in May, compared to 2.6% in April. Although these figures came in above market expectations, they indicate that inflation remains far from the peak levels recorded in 2022, reinforcing the conviction that the Federal Reserve now has the necessary leeway to move toward cutting interest rates without being accused of compromising inflation targets.

Therefore, I believe gold is likely to continue its gains over the coming weeks, especially if the Fed confirms in upcoming speeches its intention to ease policy. With the dollar remaining under pressure from weak economic data, the environment becomes more favourable for gold’s ascent. However, this rise will remain temporarily constrained by market risk appetite levels, which in turn feed on political and trade news.

Accordingly, I can say that gold currently stands at a sensitive crossroads between monetary policy and geopolitical reality. If signals toward rate cuts continue in tandem with ongoing international calm, we may witness gold’s transition from a crisis-time haven to a smart hedge against dollar weakness and accommodative monetary policies. In this case, the temporary gains will not be a mere rebound but the beginning of a stronger new upward wave.

Technical Analysis of Gold ( XAUUSD ) Prices:

Gold is showing mixed technical movements that reflect a struggle between long-term positive momentum and short-term negative pressures. On the long-term scale, the uptrend remains intact thanks to the price holding steady above the 100-day exponential moving average on the daily timeframe, which supports gold to resume its advance toward higher levels. However, this optimism clashes with short-term weakness indicators, most notably the continued trading within a descending channel since the recent peak near $3,450, with the price remaining below the resistance level R1 at $3,322 and the main moving average on the four-hour chart. This situation reflects a limited bearish bias currently and in the very short term.

From a technical standpoint, the price is currently hovering around $3,296 after rebounding from a key support zone between $3,250 and $3,260, which aligns with the lower boundary of the descending channel. This level represents a critical pivot point, as a break above the next resistance at $3,322 could support a move toward $3,350 — the highest level gold reached on June 26. A sustained breakout above that could extend gains toward the psychological level of $3,400, and further to $3,425, which corresponds to the upper band of the daily Bollinger range.

On the other hand, the Relative Strength Index (RSI) on the four-hour timeframe has just exited the oversold zone, reinforcing the potential for a technical rebound. However, it does not yet confirm a definitive trend reversal without a break above key resistance levels.

If gold fails to surpass the technical resistance near $3,302 and then $3,322, and remains capped below them, it could face renewed selling pressure that would push it back toward a retest of the $3,250 support. A break below that level would open the way for a move toward the $3,220 area, followed by the critical support at $3,200. If the price breaks below $3,170 on the daily chart, the overall outlook would turn bearish, with a possible test of the May 15 low at $3,120. Accordingly, the overall outlook for gold remains conditionally bullish, as long as upward momentum is regained above the $3,302 and $3,322 resistance levels. However, a decline below key support levels would shift the short-term technical picture back under seller control.

Support Levels: $3,250 – $3,232 – $3,200

Resistance Levels: $3,297 – $3,322 – $3,397

 

Zaid Barem / ymm