Insights 
VT 
Gold price retraced to near $3,360 on Wednesday after three days of gains. This comes amid expectations that the Federal Reserve could resume its monetary-expansion cycle in September, which typically benefits non-yielding assets like gold.
Market sentiment for more dovish Fed policy increased following the US Nonfarm Payrolls report, which suggested a slowdown in labour demand. Meanwhile, President Trump is expected to announce a replacement for Fed Governor Adriana Kugler, with possible changes in leadership that could influence future rate cuts.
Gold Price Movement
Gold currently trades within a Symmetrical Triangle formation, oscillating around the 20-day Exponential Moving Average. Its 14-day Relative Strength Index indicates reduced volatility, with key support and resistance levels identified for future price movements.
Central banks are the largest gold purchasers, with their reserves growing significantly. In 2022, they added 1,136 tonnes worth around $70 billion, reflecting gold’s appeal as a reliable store of value. Emerging economies such as China, India, and Turkey are noted for increasing their gold reserves.
Gold prices tend to inversely correlate with the US Dollar and US Treasuries. Prices are sensitive to geopolitical instability, recession fears, and interest rates, as these factors influence its appeal as a safe-haven asset and hedge against inflation.
With gold pulling back to near $3,360, we see an opportunity developing ahead of the September Federal Reserve meeting. The market is pricing in a return to easier monetary policy, a view that was strengthened by the recent July jobs report, which came in at just 95,000 new positions. This slowdown in the labor market makes a dovish Fed pivot much more likely.
The price is currently coiling within a Symmetrical Triangle formation, which tells us a significant move could be on the horizon. The low reading on the 14-day Relative Strength Index confirms this period of reduced volatility, suggesting energy is building for a breakout. We are closely watching the triangle’s boundaries for our next signal.
Trading Strategy Insights
For derivative traders, this setup suggests positioning for a spike in volatility rather than picking a firm direction just yet. Buying long-dated straddles or strangles for September allows us to profit from a large price swing, whether the Fed delivers the expected rate cut or surprises everyone. This strategy effectively buys the breakout before it happens.
We are also watching the inverse relationship with the US Dollar, which has recently fallen below the 102 level on the DXY index. This weakness in the dollar, combined with falling Treasury yields, makes holding a non-yielding asset like gold more attractive. These trends are likely to continue if the Fed signals an easing cycle.
The long-term picture remains very supportive, as we see persistent buying from central banks. We remember the record purchases in 2022, and the World Gold Council’s latest report for the second quarter of 2025 showed another 215 tonnes were added to official reserves. This ongoing demand from major players like China and Turkey creates a solid price floor.
Finally, gold’s role as a safe haven is as important as ever, with renewed trade tensions creating global uncertainty. The latest core inflation data for July, which eased to 2.8%, shows that price pressures have not been fully tamed. These factors reinforce the need to hold gold as a hedge against both inflation and geopolitical risk.
