Gold is attempting a tepid bounce from six-day lows near $4,000 in Wednesday’s Asian trades, awaiting the US Federal Reserve (Fed) monetary policy outcome to determine the next major move.
Gold jittery amid fresh Iran risks, ahead of Fed
Gold is consolidating two back-to-back days of losses, with traders repositioning ahead of the Fed event risks.
In doing so, Gold is trying to build on the intraday bounce, as the US Dollar (USD) holds overnight losses, following soft US Goods Trade Balance data for June and a profit-taking pullback from three-month highs.
However, resumption of hostilities in the Middle East fuels a sharp 4% rebound in Oil prices, reigniting inflation concerns and boosting hawkish Fed expectations, which limits the renewed upside in the non-yielding bullion.
US Central Command: carried out precision strikes in Iraq targeting Iran-backed groups planning attacks on US forces and Saudi oil facilities. This followed the IRGC firing multiple ballistic missiles from Iran at US troops in the Middle East and on oil facilities in Saudi Arabia.
Further, Gold traders refrain from creating any fresh positions before the Fed policy announcements, amid growing real risk of the Fed opting for an interest rate hike this week.
Markets are pricing in roughly a 30% chance of a 25-basis-point (bps) Fed rate hike at the July meeting, slightly up from 25% seen over a week ago, according to the CME Group’s FedWatch Tool, while expecting an 80% probability of a hike in September.
Beyond the interest rate decision, the vote split and new Fed Chair Kevin Warsh’s tone during the post-policy meeting will be closely scrutinized for fresh hints on September rate hike prospects.
If policymakers acknowledge persistent inflation, the vote split proves more hawkish than expected, or Warsh explicitly leaves the door open for a rate hike later this year, the US Dollar and Treasury yields could strengthen, putting renewed pressure on non-yielding Gold.
Conversely, if Warsh downplays the inflationary impact of higher energy prices and reiterates that future policy decisions will depend on incoming economic data, markets could scale back September rate hike bets. That would likely weaken the US Dollar, pull Treasury yields lower, and fuel a sustained Gold price recovery.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,028.78, extending a corrective phase below all major moving averages and keeping a bearish near-term bias in place. The 21-day simple moving average (SMA) at roughly $4,070 sits just above spot as immediate resistance, with the 50-day SMA near $4,202 reinforcing the broader topside cap, while the 100-day and 200-day SMAs clustered around $4,447–4,491 further above suggest the medium-term trend remains under pressure. The Relative Strength Index (14) hovering around 44 stays below the neutral 50 line, hinting that downside momentum is still dominant, even if oversold conditions are not yet evident.
On the topside, initial resistance is aligned at the 21-day SMA around $4,070, followed by the 50-day SMA near $4,202, where renewed selling interest could emerge if prices attempt a rebound. Higher up, the 100-day SMA at about $4,447 and the 200-day SMA near $4,491 form a distant resistance band that would need to be reclaimed to ease the prevailing bearish structure. On the downside, with no nearby moving-average supports, traders may look to recent price lows and psychological round numbers below $4,000 as potential interim demand zones, but failure to hold those areas would leave XAU/USD vulnerable to a deeper slide.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
H2 2026 outlook for Gold Analysts at Commerzbank report that they have "lowering our year-end gold price forecast to USD 4,500 per troy ounce (previously: USD 4,800)," citing the "significant fall in prices" driven by the Fed "adopting a more hawkish stance than expected." Even so, they see room for a rebound from current levels, arguing that "current market expectations of Fed rate hikes [are] excessive" and that "Fed interest rates will remain unchanged until the end of the year."
In their baseline scenario, "the Fed would likely refrain from raising interest rates and might even cut its key interest rate from mid-2027 onwards, as the 2% target would then be reached in spring 2027." Commerzbank says this would "provide[] scope for a further price increase next year to USD 5,000 per troy ounce by the end of 2027 (previous forecast: USD 5,200)." However, they caution that "without a reversal in interest rate expectations, a lasting return of ETF investors and a recovery in the gold price are unlikely."
Economic Indicator FOMC Press Conference The press conference is about an hour long and has two parts. First, the Chair of the Federal Reserve (Fed) reads out a prepared statement, then the conference is open to questions from the press. The questions often lead to unscripted answers that create heavy market volatility. The Fed holds a press conference after all its eight yearly policy meetings.
Gold and silver remain under pressure ahead of the Fed decision, with gold testing $3,950 support and silver trading between $55 and $64.
Gold (XAU) and silver (XAG) prices remain under pressure ahead of the Federal Reserve’s interest rate decision. Gold hit a high of $4,116 on Monday before sliding back to $4,000. The metal was weighed down by a stronger U.S. dollar and hopes of a hawkish Fed. Fed could maintain the interest rates at 3.50%-3.75%. But a statement by Chairman Kevin Warsh could indicate that the rate will stay elevated as long as inflation remains higher than the 2% target. It may support the US dollar and push gold and silver prices lower in the short term.
The softer data from the US economy supported the gold rebound. The consumer confidence dropped in July and the private sector began to hire fewer people. These figures could ease some of the pressure for tighter monetary policy. If the Fed emphasises slower growth and employment, gold could rally.
Gold Technical Analysis: $3,950 Support Faces Fed Pressure The daily chart for spot gold shows that prices have been consolidating below the resistance of $4,200. This consolidation now shows that prices are under pressure. Therefore, a break above $4,200 is required to ease this pressure. If the gold price fails to break above $4,200, prices will likely reverse to the downside and break the $3,950 level. This break may open the door for strong drop toward the $3,800 area. On the other hand, if prices break above $4,200, it will likely push further toward $4,500.
The 4-hour chart for spot gold also shows the same pressure as prices are trading at the edge of the triangle pattern that emerged from the January 2026 highs. Prices have been showing bearish pressure since January 2026. Once prices broke below $4,500, the move pushed them toward the $3,900-$4,000 area.
A break below $3,950 will indicate that prices have broken to the downside and may drop further toward $3,800. If the triangle breaks to the upside, then $4,200 will be the first immediate resistance.
Silver Technical Analysis: $55 Support and $64 Resistance Define the Next Move The daily chart for spot silver shows strong consolidation between the $55 and $64 level. The price does not show any clear direction in the short term. But the $55 remains the lower boundary of primary support. A break below this level may push prices further downward toward the $45 area. But a break above $64 will indicate a strong move toward the $72 area. A break above $64 will likely signal that prices are attempting to move out of the $55-$64 range.
The 4-hour chart for spot silver shows that prices have been trading near the lower boundary of descending wedge pattern. However, the recent consolidation shows considerable uncertainty. The spot silver needs a minimum push above $60 to ease bearish pressure in the market.
A confirmed break above $64 will push the price toward the $70-$72 area which is defined by the resistance of the descending wedge pattern.
Bottom Line Gold and silver could continue to fluctuate as investors respond to the Fed and their outlook on interest rates. A hawkish message could be bullish for the US dollar and bearish for both metals. Gold price is stuck in range between $3,950 and $4,200. On the other hand, the silver price consolidates between the $55 and $64. A break of these levels will define the next move in metals.
Silver price (XAG/USD) trades 1.14% higher to near $57.80 during the Asian trading session on Wednesday. The white metal gains even as oil prices rebound strongly due to renewed conflicts between the United States (US) and Iran.
At press time, the WTI Oil price is up 3.65% to near $81.20, snapping a three-day losing streak.
The US Central Command (CENTCOM) reported late Tuesday that it intercepted all ballistic missiles launched by Iranian Islamic Revolutionary Guard Corps (IRGC) forces. In retaliation, CENTCOM reported carrying out precision strikes in Iraq, targeting Iran-backed groups planning attacks on US forces and Saudi oil facilities.
The Silver price has underperformed in the past months as higher oil prices boost inflation expectations, a scenario that forces global central banks to lean towards higher or steady interest rates.
Theoretically, higher interest rates by central banks bode poorly for non-yielding assets, such as Silver.
Meanwhile, investors await the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT. According to the CME FedWatch tool, traders see a 69.5% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75%. This will be the fifth straight policy meeting when the Fed will maintain the status quo.
Investors should not expect any remarks from the Fed regarding the monetary policy guidance, as Chairman Kevin Warsh explicitly said in the previous meeting that “so-called forward guidance is not well-suited in the current policy juncture”.
Silver technical analysis
XAG/USD trades higher at around $57.63 at press time, but is keeping a bearish near-term tone as it holds below the 20-day Exponential Moving Average (EMA), which is at roughly $58.93.
The fact that price remains capped by this short-term EMA suggests rallies are being sold into, while the Relative Strength Index (RSI) around 43 stays below the neutral 50 line, hinting that downside pressure still dominates even if conditions are not oversold.
On the topside, initial resistance is defined by the 20-day EMA near $58.93, and a daily close above this barrier would be needed to ease the current downside bias and open room for a further rebound towards $60.00. Looking down, the July 17 low at $54.77 is the key support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
EUR/USD holds ground for the second successive day, trading around 1.1390 during the Asian hours on Wednesday. The US Dollar (USD) struggles against the Euro (EUR) as investors are closely monitoring the Federal Reserve’s (Fed) upcoming policy decision, where the central bank is widely expected to leave interest rates unchanged.
Traders are currently pricing in a 30.5% chance of an immediate rate hike, an unusually high level of uncertainty so close to a policy announcement. Looking further ahead, markets are also factoring in a 76.6% probability of a rate increase in September, reinforcing expectations that borrowing costs could remain elevated for longer.
The US Dollar (USD) may find support amid renewed hostilities in the Middle East, which have reignited geopolitical tensions, keeping investor focus firmly on inflationary risks and the broader interest rate outlook in the United States (US).
Geopolitical risk escalated sharply after the IRGC launched a surprise ballistic missile strike targeting a US military base in Jordan at approximately 5:45 PM ET. US Central Command reported that defense systems successfully intercepted all incoming missiles, preventing casualties and structural damage. Believed to be a direct countermeasure to recent US strikes against Iranian naval assets, the incident triggered immediate retaliation; CENTCOM subsequently executed precision airstrikes in Iraq aimed at neutralizing Iran-backed groups planning operations against US forces and Saudi energy infrastructure.
The European Central Bank (ECB) unanimously kept interest rates on hold at 2.25% on July 23, but strongly signaled a September rate hike. Leadership revealed that several Governing Council members pushed for an immediate increase, warning that sustained high energy prices risk driving up broader inflation through second-round effects.
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7899 compared to the previous day's fix of 6.7928.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
Gold price (XAU/USD) remains subdued for the second successive day, trading around $4,020 per troy ounce during the Asian hours on Wednesday. Gold loses ground as oil prices rebounded following renewed hostilities in the Middle East, reviving geopolitical tensions and keeping investors focused on inflationary pressures and the interest rate outlook.
The escalation stems from an Iranian attack targeting US troops stationed across the region, with Iran firing multiple ballistic missiles toward a US base in Jordan around 5:45 pm ET. According to statements and video footage released by the US military, all of the surprise IRGC missiles were successfully intercepted. The strike is widely believed to be a direct response to recent US actions targeting Iranian navy boats.
Meanwhile, investors are closely monitoring the Federal Reserve’s (Fed) upcoming policy decision, where the central bank is widely expected to leave interest rates unchanged. Despite repeated calls from US President Donald Trump for lower interest rates, market sentiment remains cautious; traders are currently pricing in a 30.5% chance of an immediate rate hike, an unusually high level of uncertainty so close to a policy announcement. Looking further ahead, markets are also factoring in a 76.6% probability of a rate increase in September, reinforcing expectations that borrowing costs could remain elevated for longer.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The bond market has been struggling for the last year-plus, with some analysts saying we’re in the early stages of a secular bear market. This has forced investors to reconsider the role of bonds in a balanced portfolio, with some pivoting to tangible assets with value – like gold.
Over the last couple of years, there has been persistent upward pressure on long-term bond yields. The 10-year Treasury spiked in 2022, rising from around 1.5 percent in late 2021 to a high of nearly 5 percent in the fall of 2023. Since then, yields have remained at those elevated levels despite the Fed cutting rates and geopolitical events that would have historically created significant safe-haven demand for Treasuries.
Reuters recently reported that “inflation, heavy government borrowing, policy uncertainty and bouts of stocks and bonds falling in tandem have weakened bonds' role as a ballast, prompting some investors to look for more diversification.”
Osaic chief market strategist Phil Blancato told Reuters that bonds only work as insurance in a portfolio when inflation is low. He said the wealth management firm has cut its fixed-income ratio from the traditional 40 percent to 31 percent with a 6 percent allocation to commodities.
Inflation certainly isn’t low. It has run well above the mythical 2 percent target for years. And while the CPI had cooled in recent months, the oil shock due to the U.S.-Iran war has restoked price inflation worries.
More significantly, the money supply has been on the rise for over a year, and despite the hawkish talk about slaying inflation once and for all, the Federal Reserve is currently expanding its balance sheet with a modest quantitative easing (QE) operation. This is inflation, by definition.
Last year, Morgan Stanley CIO Michael Wilson recommended an even more aggressive portfolio rebalancing, suggesting investors should cut their bond allocation to 20 percent and swap half of the bond portfolio to gold to serve as a “more resilient” inflation hedge.
"Gold is now the anti-fragile asset to own, rather than Treasuries. High-quality equities and gold are the best hedges.”
Northern Trust analyst Grant Johnsey told Reuters that bond returns are eroded over the long-term by persistent inflation, a weakening currency, and bond supply outpacing demand.
"Many investors are worried that one or more of these variables will play out in the coming years. The issue with the bonds is that when you go out past five years, there are too many potential downside headwinds and not enough tailwinds behind it."
Johnsey’s observation underscores the fact that it is crucial to consider “real interest” rates when evaluating investment options. Conventional wisdom holds that higher inflation necessitates tighter monetary policy from central banks, meaning higher interest rates. Higher rates are considered a headwind for gold because it is a non-yielding asset. However, even as nominal interest rates rise, inflation suppresses the real rate.
In simplest terms, the real interest rate is the stated rate you see on the news, adjusted for price inflation. To calculate the real interest rate, you take the quoted nominal rate and subtract CPI. This tells you how much your investment will yield in real purchasing power over time.
For example, the 10-year Treasury bond is currently yielding just over 4.6 percent. That seems like a pretty good return. However, the CPI is running at 3.5 percent. That means the real interest rate on a 10-year Treasury is only 1.1 percent (4.6-3.5=1.1).
As the CPI increases, that real rate continues to fall.
Sagard Wealth Management CIO Stephen Harvey called the current economic environment “pro-growth and pro-inflation” and emphasized that fiscal policy now matters more than monetary policy.
In other words, investors are paying less attention to what the Fed and other central banks may do with interest rates and more attention to the rampant borrowing and spending by the world’s governments – particularly the U.S. Given America’s fiscal malfeasance, many investors have become reluctant to lend Uncle Sam more money. This is one of the primary drags on the bond market.
Harvey said Sagard is moving investors away from developed-market fixed income assets (bonds) and into a “preservation bucket” that includes commodities, gold, real estate and infrastructure. He called fixed income “the inflation loser.”
Central banks are also spurning Treasuries and upping their gold reserves. Earlier this year, the European Central Bank confirmed that gold has passed Treasuries to become the world’s top reserve asset.
Last year was the fourth-largest expansion of central bank gold reserves on record, at 863 tonnes. That was down 21 percent year-on-year, but still well above the 2010-2021 annual average of 473 tonnes.
The all-time high was set in 2022 (1,136 tonnes). It was the highest level of net purchases on record, dating back to 1950, including since the suspension of dollar convertibility into gold in 1971.
State Street global market strategist Jenn Bender told Reuters that "real assets, tangible assets valued for their intrinsic physical qualities," have gained appeal since the post-COVID inflation shock. She emphasized that the case continues to strengthen as "the bond outlook clouds and soaring equity markets appear vulnerable."
"The worry is that there is some downside risk in equities. Fixed income is not the place that people want to move their equity allocations over to. Basically, real assets is kind of where you end up."
NZD/USD trades nearly unchanged around the 0.5785 area on Tuesday, struggling to extend its earlier recovery despite a modest decline in the US Dollar (USD). The pair rebounded from recent lows but lost momentum as investors avoided large positions ahead of Wednesday’s Federal Reserve (Fed) monetary-policy announcement.
The Greenback came under pressure after the Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June. US private employers also added an average of only 15K jobs per week during the four weeks ending July 11, according to the NER Pulse report, indicating that hiring slowed for a fifth consecutive week.
The New Zealand Dollar (NZD) receives some support from the sharp decline in oil prices, as lower energy costs improve the outlook for New Zealand, which relies heavily on imported fuel. However, cautious market sentiment and uncertainty surrounding the Fed’s guidance continue to limit the Kiwi’s recovery.
The Fed is expected to leave interest rates unchanged on Wednesday. Investors will focus on the policy statement and Chair Kevin Warsh’s press conference for signals regarding future adjustments. A hawkish message could strengthen the US Dollar and push NZD/USD back toward its recent lows, while cautious guidance could support another recovery attempt.
Technical Analysis:On the 4-hour chart, NZD/USD trades at 0.5788. The pair is hovering just above both the 20-period simple moving average (SMA) at 0.5783 and the 100-period SMA at 0.5787, hinting at a fragile attempt to build a base after recent weakness, though the cluster of nearby horizontal levels keeps the near-term bias broadly neutral. The Relative Strength Index (14) at 47.8 sits slightly below the 50 line, suggesting a lack of strong directional momentum as price consolidates around its short- and medium-term averages.
On the topside, initial resistance emerges at 0.5791, followed by another nearby barrier at 0.5799, where recent supply has tended to cap rebounds; a break above these caps would open the way toward 0.5907, then 0.5930 and 0.5965. On the downside, immediate support is reinforced by the 100-period SMA at 0.5787 and the horizontal level at 0.5785, with the 20-period SMA at 0.5783 and the subsequent floor at 0.5779 guarding against a deeper pullback; a sustained move below this latter zone would undermine the nascent base-building tone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold tests critical support as a potential bullish reversal competes with bearish consolidation patterns, leaving the next breakout increasingly important for direction.
Commerzbank’s Norman Liebke reports that Silver has fallen from USD 70 to USD 57.50 per troy ounce and that the bank has lowered its forecasts, now seeing USD 67 by year-end and USD 80 by end‑2027. Despite substitution in solar and Indian import curbs, persistent market deficits and an expected Gold recovery are seen underpinning higher Silver prices ahead.
Deficits and Gold seen lifting Silver"Nevertheless, the silver price is likely to continue rising in the coming months: According to forecasts by the Silver Institute and the research firm Metals Focus, the silver market was in a supply deficit for the fifth consecutive year last year."
"Another deficit is expected this year, as supply is projected to decline more sharply than demand."
"In addition to the fundamentals and the tight market, the rise in the gold price we anticipate is the main driver of the expected rise in the silver price."
"By year-end, we expect the silver price to reach USD 67 per troy ounce (previously: USD 80) and USD 80 by the end of 2027 (previously: USD 90)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Daily Spot Gold (XAU/USD) Spot gold (XAUUSD) is edging lower late in the session on Tuesday. The selling pressure has put the market on the weak side of a short-term retracement zone at $4041.65 to $4072.40, making it new resistance.
Additionally, the trade through $4022.06 has turned $4065.42 into a new minor top and $4166.13 into a new main top.
If sellers continue to press into the close, we could be eyeing a retest of the July 17 main bottom at $3959.80. A trade through this level could open the door for a further decline into the June 30 main bottom at $3942.10.
With today’s sell-off, XAUUSD is barely holding on to its gains for July. Last month, it closed at $4007.52.
What to Watch Warsh’s press conference Wednesday afternoon is gold’s next inflection point, and the market has already told you which way it leans. Tuesday gave buyers a lower dollar and lower yields and they would not step in.
The rate repricing of the past two weeks has done structural damage to the bid, and gold is not going to recover that ground on a quiet day. The metal needs Warsh to pull back from the hawkish edge or Thursday’s PCE print from the Bureau of Economic Analysis to deliver a cooler inflation number.
If both events reinforce the tightening narrative, the selling that dominated Tuesday has room to extend. The two releases land less than 24 hours apart, and gold traders who are already positioned short have no reason to cover ahead of a compressed calendar that could go against them twice.
The technicals confirm what the fundamentals are signaling. Gold is sitting on the weak side of resistance with a series of lower tops now established above the market. The process looks like distribution, not base-building, and the July and June main bottoms are directly below with nothing between them and current prices to slow the move.
Gold is barely holding onto gains for the month, and a failure to defend this area puts last month’s close back in play. Until Wednesday or Thursday breaks the rate story, the weight stays on the sell side and the path of least resistance points lower.
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One of the themes I keep returning to is that silver’s supply is more concentrated, and more politically exposed, than its steady price history suggests. Peru is the clearest example. It is among the top handful of silver-producing countries, and in July its politics moved in a direction that could tighten an already narrow supply picture.
One Country, About a Sixth of Mine Supply On July 15, Reuters reported that Peru’s president-elect, Keiko Fujimori, could face renewed protests in the country’s mining regions as her incoming government tries to push forward large copper and other mining projects that have been delayed for years. The report drew on a study by the Observatory of Mining Conflicts in Peru, which counts roughly $64 billion in planned mining investment, much of it in poor rural areas where communities say they see little local benefit and worry about the environmental cost.
This is not a war or a coup. It is the ordinary friction of a mining democracy, and that is exactly why it is easy to underrate. But the numbers behind it are not small. Peru produced about 131 million ounces of silver in 2025, according to Metals Focus and the Silver Institute, which is about 15% of the roughly 847 million ounces the world mined that year, close to one ounce in six.
Two features of Peruvian silver make that output especially fragile. The first is that most of it is a byproduct. Peru’s mines are dug primarily for lead, zinc, and copper, and silver comes out alongside those metals rather than as the main event. This is not unique to Peru. It is how most of the world’s silver is produced: mines built primarily for silver have fallen to just 26% of global supply, a record low, according to Metals Focus and the Silver Institute, which means roughly three-quarters of all silver now arrives as a byproduct of mining for other metals.
What concentrates the risk in Peru is that so much of this byproduct supply sits in one country. It means silver supply from Peru rises and falls with decisions made for entirely different reasons, driven by the economics of lead, zinc, and copper, and it cannot easily be increased just because silver is expensive. The second is that many of Peru’s silver projects are run by small and mid-sized companies with thin balance sheets, which makes them more vulnerable to the energy-cost spikes and road blockades that periodically disrupt the country’s mining regions.
The backdrop was already unsettled before the election result. Peru issued an emergency decree in May to deal with an energy shortage, road blockades have periodically interrupted shipments of concentrate, and the program to formalize the country’s large informal-mining sector has been extended into the end of 2026. A wave of protest over stalled projects would land on top of all of it.
Peru sits right at the center of that math. The survey already expects Peruvian output to fall in 2026 on weaker lead and zinc production, and names Peru first among the declines that outweigh recovering output in Mexico and leave the global total slightly lower. In other words, Peru is already forecast to be a drag on world supply before any new political unrest is added. A wave of protest that stalled projects or blocked roads would push in the same direction, from an already flat base.
What This Means to Silver Investors The practical lesson is that silver’s supply risk is concentrated in a handful of countries, and it is the kind of risk that builds quietly rather than announcing itself.
An oil shock or a war moves the price this week, and it is easy to watch. A president-elect’s mining agenda, a study on rural protest, an emergency energy decree: these move nothing today, and they never generate a dramatic one-day chart. But they accumulate. Peru, Mexico, and China, between them, dominate the world’s mined and refined silver, and in a single fortnight, all three showed up on the risk ledger at once, through Peru’s unrest study, a US-Mexico trade review, and China’s export controls. None of them removed an ounce from the market in July. What they did was raise the political premium sitting over the supply that has to fill a persistent shortfall.
That shortfall is the anchor. The market is forecast to run a sixth consecutive annual deficit of 46.3 million ounces in 2026, according to Metals Focus and the Silver Institute. A deficit means the world is consuming more silver than it produces and recycles, and covering the difference from existing stocks. Against that backdrop, a threat to roughly a sixth of global mine supply is not a footnote. It is a threat to the single side of the equation that has no slack left in it.
None of this is a forecast about next week’s price, which will keep taking its cues from oil, the dollar, and the Federal Reserve. It is a point about the ground underneath the price. Studying how silver has traded in 2026 suggests that we will see the sharp moves come and go with the macro headlines, while the longer-term case for silver rests on a supply base that is flat, concentrated, and increasingly political. The war grabbed the headlines in July. Peru is the one worth watching after they fade, and it is exactly the kind of slow, structural risk the framework in Silver Rising is built to track.
Peru’s supply risk is one dimension of the 100-catalyst framework I analyze in Silver Rising, alongside the five other Deep Dives in this issue of the Silver Catalyst newsletter. I strongly encourage you to sign up. Get full Silver Catalyst Newsletter and Silver Rising book today.
GBP/JPY broke below 218 on Monday, trading near 217.84, pressured by UK political uncertainty and softer bond yields The wide UK-Japan rate gap still supports carry trades, but Japanese intervention fears and dovish repricing are capping gains Investors should monitor 217.50 support and 218.50 resistance while watching central-bank guidance for clearer signals on the pair’s next direction. The British pound’s strong performance against the Japanese yen in early July has moderated, with the yen seemingly turning the tables. After reaching a high near 219.61-219.70 in mid-July, the GBP/JPY pair consolidated before falling below the significant 218.00 level. By July 27, the exchange rate was trading around 217.84, reflecting broader pound weakness.
What’s Driving the Slide? Several factors seem to be lining up right now. Political shifts created fresh uncertainty, with the pound losing ground as new Prime Minister Andy Burnham took office. Markets don’t like uncertainty, and a leadership change naturally raises questions about policy direction, even before anything real shifts.
That gap, usually around 275 basis points, hasn’t gone away. What has changed is how confident the market feels about the gap widening further. Plus, persistent talk that Japanese authorities might step in to prop up the yen has kept the pair from advancing much for weeks.
Meanwhile, traders have been cutting back exposure ahead of this week’s central bank decisions. The Bank of England (BoE) will likely hold its benchmark rate at 3.75%, and the Bank of Japan (BoJ) is also expected to keep its policy rate unchanged at 1%.
Oil price drops and a temporary calm in US-Iran tensions have also eased inflation worries. This, in turn, pulled UK government bond yields lower, taking away one of the Pound’s recent supports.
Is the Carry Trade Losing Its Grip? The strength of GBP/JPY in recent months was largely attributed to the significant interest rate differential between the UK and Japan. This gap made the pair attractive for carry trades, where investors borrow low-interest yen to invest in higher-yielding pound assets.
That gap, historically estimated near 275 basis points, hasn’t disappeared. What has changed is the market’s confidence in how much further that gap might widen, and lingering speculation that Japanese authorities could step in to support the yen has kept a lid on the pair’s advances for weeks.
At the same time, reports of BoJ officials being open to faster rate increases, combined with ongoing speculation about possible currency intervention, have intermittently supported the yen.
Both the BoE and BoJ were widely expected to keep rates steady at their late-July meetings. This limited the chance of a sudden policy split that would drastically change the pair’s medium-term path. So, the current dip looks more like a correction after a strong run, rather than the start of a long downturn.
How Should Investors Position? Considering the current political uncertainty, cautious central bank outlooks, and reduced carry trade appeal, adopting a defensive investment approach appears prudent for the short term. Investors should closely monitor the Bank of England and Bank of Japan announcements this week, as any unexpected policy shifts could lead to significant repricing of the GBP/JPY pair.
A sustained move below 218.00, confirmed by a break under 217.50, could increase bearish pressure towards 216.60 and 215.00. Conversely, a recovery above 219.00 would support the possibility of testing previous highs.
Is the UK-Japan rate gap still supporting the pair?
Yes, though intervention fears and reduced confidence in further widening have weakened its usual carry-trade support.
What should investors focus on this week?
The BoE and BoJ policy decisions, both expected to hold rates, but any surprise could move the pair sharply.
The loudest silver story in July was a shooting war, but the more durable threat was a peaceful election in Peru, a country that digs up close to one silver ounce in six.
Silver trades near $59.43 an ounce as I write this, with the gold-silver ratio around 69. That ratio is simply the number of silver ounces it takes to buy one ounce of gold, and it sits near the high end of its historical range, a level long-term buyers read as silver being inexpensive against the larger metal. Silver is up more than 50% from where it stood a year ago, though it remains well below the record of $121.62 set on January 29.
Most of the past fortnight's price action came from the Middle East, where renewed strikes on Iran drove oil higher and pulled silver down with it. That is the noisy, macro-driven side of the market, and it tends to dominate the headlines. Underneath it, though, a slower and more consequential story was developing on the supply side, in a country that rarely makes the front page of a metals report.
I write the Silver Catalyst newsletter for Golden Meadow®, and one of the themes I keep returning to is that silver's supply is more concentrated, and more politically exposed, than its steady price history suggests. Peru is the clearest example. It is among the top handful of silver-producing countries, and in July its politics moved in a direction that could tighten an already narrow supply picture.
One country, about a sixth of mine supplyOn July 15, Reuters reported that Peru's president-elect, Keiko Fujimori, could face renewed protests in the country's mining regions as her incoming government tries to push forward large copper and other mining projects that have been delayed for years. The report drew on a study by the Observatory of Mining Conflicts in Peru, which counts roughly $64 billion in planned mining investment, much of it in poor rural areas where communities say they see little local benefit and worry about the environmental cost.
This is not a war or a coup. It is the ordinary friction of a mining democracy, and that is exactly why it is easy to underrate. But the numbers behind it are not small. Peru produced about 131 million ounces of silver in 2025, according to Metals Focus and the Silver Institute, which is about 15% of the roughly 847 million ounces the world mined that year, close to one ounce in six.
Two features of Peruvian silver make that output especially fragile. The first is that most of it is a byproduct. Peru's mines are dug primarily for lead, zinc, and copper, and silver comes out alongside those metals rather than as the main event. This is not unique to Peru. It is how most of the world's silver is produced: mines built primarily for silver have fallen to just 26% of global supply, a record low, according to Metals Focus and the Silver Institute, which means roughly three-quarters of all silver now arrives as a byproduct of mining for other metals. What concentrates the risk in Peru is that so much of this byproduct supply sits in one country. It means silver supply from Peru rises and falls with decisions made for entirely different reasons, driven by the economics of lead, zinc, and copper, and it cannot easily be increased just because silver is expensive. The second is that many of Peru's silver projects are run by small and mid-sized companies with thin balance sheets, which makes them more vulnerable to the energy-cost spikes and road blockades that periodically disrupt the country's mining regions.
The backdrop was already unsettled before the election result. Peru issued an emergency decree in May to deal with an energy shortage, road blockades have periodically interrupted shipments of concentrate, and the program to formalize the country's large informal-mining sector has been extended into the end of 2026. A wave of protest over stalled projects would land on top of all of it.
There is a second-order effect that reaches well beyond Peru's borders. Peru is a major supplier of silver-bearing concentrate to China, the country that does most of the world's silver refining. A serious disruption in Peru would not just remove Peruvian ounces; it would tighten the raw material feeding Chinese refineries, at the same time that China's own export controls are keeping more of its refined silver at home. The squeeze would compound.
Sources: MINING.COM / Reuters: Fujimori's Mining Push Could Spur Unrest in Peru | Silver Bullion: Peru's Energy Crisis and the Silver Market | Mexico Business News: US Demands Fall From 54 to 14 Ahead of July 20 Talks | White & Case: Critical-Minerals Section 232 Negotiations
Why this matters more than one country's politicsThe reason Peru carries weight is that the world's mined silver supply barely grows, so there is no cushion to absorb a loss.
In 2025, global mine production came in at 846.6 million ounces. For 2026, Metals Focus and the Silver Institute forecast it essentially flat, at 844.1 million ounces, a decline of about 2.5 million ounces. That flatness is the whole point. Silver has been in a supply deficit, meaning the world uses more than it mines and recycles, and it has closed the gap by drawing down above-ground stockpiles that are not unlimited. When mine supply cannot grow, every regional threat to it matters more, because there is nothing spare to make up the difference.
Peru sits right at the center of that math. The survey already expects Peruvian output to fall in 2026 on weaker lead and zinc production, and names Peru first among the declines that outweigh recovering output in Mexico and leave the global total slightly lower. In other words, Peru is already forecast to be a drag on world supply before any new political unrest is added. A wave of protest that stalled projects or blocked roads would push in the same direction, from an already flat base.
What this means to Silver investorsThe practical lesson is that silver's supply risk is concentrated in a handful of countries, and it is the kind of risk that builds quietly rather than announcing itself.
An oil shock or a war moves the price this week, and it is easy to watch. A president-elect's mining agenda, a study on rural protest, an emergency energy decree: these move nothing today, and they never generate a dramatic one-day chart. But they accumulate. Peru, Mexico, and China between them dominate the world's mined and refined silver, and in a single fortnight all three showed up on the risk ledger at once, through Peru's unrest study, a US-Mexico trade review, and China's export controls. None of them removed an ounce from the market in July. What they did was raise the political premium sitting over the supply that has to fill a persistent shortfall.
That shortfall is the anchor. The market is forecast to run a sixth consecutive annual deficit of 46.3 million ounces in 2026, according to Metals Focus and the Silver Institute. A deficit means the world is consuming more silver than it produces and recycles, and covering the difference from existing stocks. Against that backdrop, a threat to roughly a sixth of global mine supply is not a footnote. It is a threat to the single side of the equation that has no slack left in it.
None of this is a forecast about next week's price, which will keep taking its cues from oil, the dollar, and the Federal Reserve. It is a point about the ground underneath the price. If you follow how silver has traded in 2026, you will see the sharp moves come and go with the macro headlines, while the longer-term case for silver rests on a supply base that is flat, concentrated, and increasingly political. The war grabbed the headlines in July. Peru is the one worth watching after they fade, and it is exactly the kind of slow, structural risk the framework in Silver Rising is built to track.
Peru's supply risk is one dimension of the 100-catalyst framework I analyze in Silver Rising, alongside the five other Deep Dives in this issue of the Silver Catalyst newsletter.
US Dollar Talking Points: The US Dollar retains a bullish look but the big question here is whether the rate hike odds that have priced in remain after tomorrow’s Fed meeting. While newly installed Fed Chair Kevin Warsh taking a hawkish approach makes sense up to this point the bigger question is whether he’ll push the envelope with stocks showing relative weakness, which would also possibly expose President Trump’s choice in the nomination process.
It’s one of those weeks where the range of possible outcomes is far and wide. As we go into tomorrow’s Fed meeting there’s a peculiar degree of indecision, as there’s an approximate 30% probability of rates being hiked tomorrow.
To this point, the Fed has often used messaging and media interviews to telegraph their actions to avoid unsettling market participants and, in turn, inviting volatility. But that’s not the case for tomorrow and this gives some potential for price movements.
CME Fedwatch Rate Probabilities for July FOMC Data taken from CME Fedwatch Going out to the end of the year shows a near 90% chance of at least one rate hike, with a 50% chance of at least two rate hikes.
If this were to happen, it would make President Trump’s choice to lead the Fed appear as through he’s directly refuting the President’s desire for rate cuts, especially considering this is into the lead-in to the US election in November.
This also helps to give some context to the US Dollar move of strength, as it was the last Fed meeting, on June 17th, where the USD broke out and ran to its current high. This also sets a very high bar for continued USD strength as not only will Warsh need to sound very hawkish tomorrow, but he’ll have to sound concerned that inflation isn’t going in the right direction which would lead to expectation for even more hawkishness down the road.
CME Fedwatch Rate Probabilities into End of 2026 Data taken from CME Fedwatch US Dollar – Is That All? The last Fed meeting in June was important as it was a quarterly rate decision, so we got updated guidance and projections, unlike tomorrow’s, which is just an announcement and a press conference. This puts even more emphasis on Kevin Warsh, but when we heard from the bank and the Summary of Economic Projections last month, DXY put in a massive breakout that pushed the USD up to a fresh yearly high, until resistance showed at the Fibonacci level of 101.80.
From there – profit taking showed in an orderly fashion in the form of a bull flag, and that led to the reaction from two weeks ago when below-expected CPI and PPI prints provided a dip with which buyers could react. I looked into those in the webinar at the time and bulls reacted in a big way, sparking a bullish trend that lasted for the next week and change.
More recently, however, the move has stalled ahead of that 101.80 level and given how aggressively rate hikes have priced-in as seen from the above two tables, it would seem the Fed would really have to shock the market to continue this rally in the Dollar.
Also notable – and addressed below – is the US Dollar from the perspective of counterparts and what could lead to a reliably stable trend in the DXY basket.
US Dollar Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview USD Structure At this point a simple move of less-hawkishness can help to inspire a pullback and I think from Warsh’s perspective that would probably be the optimal outcome, especially considering the matter in USD/JPY and what could possibly happen to Treasury rates on the long-end of the curve if markets become unsettled.
As looked at coming into this week, there’s short-term bullish structure to match the long-term backdrop. So far, the ‘s1’ level has held support, but into tomorrow, the ‘s2’ zone is also viable, running from 100.86-100.99, with 100.65 and 100.36-100.44 below that.
US Dollar Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY
There’s another ascending triangle in USD/JPY and with rate decisions from both economies this week that can present a dangerous scenario.
As I said in the video I’d be surprised if a visit to 165.00 doesn’t bring some kind of reaction from policymakers, either in the form of an actual intervention or perhaps just a threat of one. The bigger question is whether that’ll work as anything more than a pullback and until the Bank of Japan sounds more concerned about inflation I have a hard time getting too aggressive on reversal scenarios in the pair, particularly with markets so amped up for US rate hikes into the end of this year.
I think this could have an outsized impact on the USD because that carry trade can be truly difficult to gauge in size. JPY is a mere 13.6% allocation of the USD basket but like we saw back in July of 2024, if that massive carry trade begins to unwind the Dollar selling could show in pairs even without the Japanese Yen, such as EUR/USD.
At this point there’s another ascending triangle setting up in USD/JPY and so far bulls haven’t been able to push beyond 164, which I think echoes that expectation of something happening around 165. But if we see Warsh show calm and perhaps Ueda sound a bit more hawkish, we could get a pullback that could allow for trend continuation.
USD/JPY Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD
The Euro is 57.6% of the DXY basket and despite those high odds for rate hikes in the US later this year, the pair has been rather unmoved of late – even with a wide open door for bears to make a push.
Last week saw a dovish ECB produce a bearish engulf on the daily to break a bear flag. A day later, the pullback saw sellers show up at prior support of 1.1402.
But now, not only is there no fresh low there’s a build of a falling wedge pattern. If we do hear Warsh as less-hawkish tomorrow this could give shorts excuse to pare positions and that could lead to a counter-trend move. Whether that becomes anything more than a pullback could, paradoxically, dial back to the argument around the Japanese Yen. But until there’s a closed body break on the daily above the 1.1500 level this market has a bearish big picture bias.
EUR/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD When it comes to the Dollar I always try to retain some degree of balance, because, after all, it is a basket of underlying currencies rather than a market traded completely in a vacuum. GBP/USD still retains a bearish look and there’s a BoE rate decision on Thursday morning, less than 24 hours after the Fed.
The 1.3300 level remains a problematic spot but there’s a similar falling wedge that’s developed here, and if Warsh and perhaps even the BoJ can successfully tilt a pullback in the US Dollar and USD/JPY, there may be something to work with in Cable. First – bulls would need to take out 1.3325-1.3343, and then the 1.3390 area would be the next spot for them to encounter. But – at that point we can look for a higher-low and that’s something that could possibly lead-in to reversal scenarios in the pair.
GBP/USD Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Canadian Dollar Technical Forecast: USD/CAD Weekly Trade Levels USD/CAD has recovered sharply after rebounding off support zone earlier this month. The rally is now approaching a major resistance confluence that could determine the next multi-week move. Weekly momentum suggests the recovery is beginning to lose steam beneath resistance A sustained breakout would reinforce the broader bullish outlook, while rejection would keep the corrective decline intact. Tomorrow’s FOMC decision and evolving Fed expectations could provide the catalyst for the next directional move. Resistance 1.4140/55 (key), 1.4239, 1.4292– Support 1.4017, 1.3956/78 (key), ~1.3861 USD/CAD has recovered from this month's low after a sharp 1.7% pullback from the yearly high, but the advance is now beginning to show signs of exhaustion beneath a major confluence of resistance. Multiple technical studies converge just overhead, making this one of the most important inflection zones since the correction began. A decisive weekly close above this barrier would strengthen the case that the broader yearly uptrend is ready to resume, while another rejection would keep the focus on a deeper corrective pullback heading into Wednesday's FOMC decision. Battle lines drawn on the USD/CAD weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Loonie setup and more. Join live on Monday’s at 8:30am EST.
Canadian Dollar Price Chart – USD/CAD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Technical Outlook: In my last Canadian Dollar Technical Forecast we noted that USD/CAD had, “extended the May rally to fresh yearly highs and while the outlook remains constructive, the risk for further exhaustion into the start of the month mounts IF price breaks below this key pivot zone. The July opening-range is now taking shape above and a breakout may offer guidance in the days ahead.” USD/CAD broke lower two-weeks later with a decline of more than 1.7% off the yearly high rebounding last week at the 2025 May high at 1.4017.
The recovery is showing signs of exhaustion today just ahead of confluent resistance at 1.4140/55- a region defined by the November high, the 2025 February low and the 61.8% retracement of June decline. Note that the median line of the yearly pitchfork converges on this zone and a topside breach / weekly close above would be needed to mark resumption of the yearly uptrend. Subsequent resistance objectives are eyed at the 2025 March lows at 1.4239, and the 2025 high-week close / 61.8% retracement of the 2025 decline at 1.4292. Look for larger reaction there IF reached.
Weekly support remains at 1.4017 with broader bullish invalidation just lower at 1.3956/78- a region defined by the 38.2% retracement of the yearly range and the 2022 & March swing highs. Note that this threshold converges on the lower parallel in August and a break / weekly close below this slope would be needed to suggest a more significant high is in place and a larger trend reversal is underway. Such a scenario would expose the 52-week moving average near ~1.3861.
Bottom line: The USD/CAD recovery trading just below pivotal resistance ahead of tomorrow’s highly anticipated FOMC rate decision. The focus is on a breakout of the 1.4017-1.1455 range for guidance. From a trading standpoint losses would need to be limited to 1.3955 for the yearly uptrend to remain viable with a weekly close above 1.4155 required to fuel the next leg of the advance.
Despite broad consensus that the Fed will leave policy unchanged tomorrow, interest rate markets continue to price a meaningful probability of further tightening. Fed funds futures imply a roughly 30% chance of a hike this week and a 75% probability of at least one 25-basis-point increase by September. Stay nimble into the release and watch the weekly / monthly close for guidance here. Review my latest Canadian Dollar Short-term Outlook for a closer look at the near-term USD/CAD technical trade levels.
US / Canada Economic Data Release
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts S&P 500, Nasdaq, Dow Bitcoin (BTC/USD) Japanese Yen (USD/JPY) Euro (EUR/USD) Swiss Franc (USD/CHF) Gold (XAU/USD) British Pound (GBP/USD) Australian Dollar (AUD/USD) US Dollar Index (DXY) --- Written by Michael Boutros, Senior Technical Strategist
Treasury yields moved lower as bond traders focused on the sell-off in the oil markets. The yield of 2-year Treasuries pulled back towards the 4.27% level, while the yield of 10-year Treasuries settled near 4.60%. Falling Treasury yields did not provide support to gold markets as traders focused on longer-term Fed policy outlook.
U.S. dollar pulled back against a broad basket of currencies as forex traders reacted to the pullback in Treasury yields. Weaker U.S. dollar is bullish for dollar-denominated commodities, but it did not provide support to gold markets in today’s trading session.
Currently, gold is trying to settle below the support level at $4020 – $4040. In case this attempt is successful, gold will head towards the next support, which is located in the $3930 – $3950 range. A move below the $3930 level will indicate that gold is ready to gain additional downside momentum.
On the upside, a move above the $4100 level will push gold towards the resistance level at $4180 – $4200.
Silver Is Under Pressure As Gold/Silver Ratio Moves Above 70.50
Once again, gold is showing signs of short-term weakness. Over the last 4 trading sessions, XAU/USD has accumulated a decline of nearly -2.4%, highlighting a relevant selling bias ahead of the Federal Reserve decision.
For now, selling pressure remains in place as the market waits for a possible more aggressive tone from the U.S. central bank. This expectation has limited gold’s ability to sustain a consistent recovery and could continue to affect the precious metal if the Fed confirms a more restrictive stance for upcoming decisions.
Fed day arrives During tomorrow’s session, July 29, 2026, the Federal Reserve is expected to announce its decision. According to the latest probability table from CME Group, the market assigns a probability above 70% that the central bank will keep interest rates unchanged, meaning no major surprises are expected in the immediate decision.
However, the most relevant point will be the central bank’s message after the announcement. The market will remain focused on whether the probability of a possible rate hike for the September 16 meeting remains near 56%. The Fed’s comments could help confirm whether a higher interest rate may become part of the U.S. monetary policy outlook over the coming months.
Source: CMEGROUP
Attention will also be on the central bank’s assessment of inflation. This has been one of the main factors leading the market to consider possible rate hikes. As of the June data, annual inflation measured by the CPI stood at 3.5%. Although this reading moved away from the year’s high of 4.2%, it remains above the Fed’s 2.00% target.
For this reason, the central bank could once again highlight inflation as an important risk that may require a more aggressive stance over the next few months. This scenario would not be entirely unexpected, considering that current inflation levels remain far from the official target.
Source: TradingEconomics
In this context, a more aggressive Fed could continue to strengthen the U.S. bond market. In previous sessions, the 10-year Treasury yield reached new 2026 highs, increasing the appeal of one of the most important safe-haven markets.
This dynamic is key for gold, as bonds are positioned as one of its main substitute markets. When yields rise, gold’s relative appeal can decline, especially because the precious metal does not pay interest. This inverse relationship has already been observed in recent sessions: while bond yields maintain an upward slope, gold has shown weakness.
In fact, the correlation coefficient remains near -0.75, reflecting a strong inverse relationship between yield movements and the price of gold.
Source: TVC, StoneX, Tradingview
The dynamic continues to depend heavily on the behavior of yields. If the bond market continues to offer more attractive returns, it could keep limiting room for a consistent recovery in gold. In addition, if the Fed reinforces expectations of a more aggressive monetary policy stance, yields could remain strong and limit demand for XAU/USD over the next few trading sessions.
Technical forecast for gold
Source: StoneX, Tradingview
Neutrality begins to gain relevance: Although gold’s daily chart still maintains a long-term bearish trend line, recent movements have started to show a more neutral short-term phase. If price fails to define a clear direction over the next few sessions, a more relevant sideways range could begin to form and become key for the coming trading weeks.
RSI: Now, the RSI is moving near the neutral 50 level. This suggests a balance between bullish and bearish impulses over the last 14 sessions. This dynamic reflects a possible indecision bias that could continue if the indicator maintains this behavior.
MACD: A similar reading can be seen in the MACD, as the histogram remains close to the neutral 0 area. This suggests that the average strength of short-term moving averages is in balance, reinforcing the possibility of an indecision phase in gold.
Key levels to watch:
4,376 USD – Crucial resistance: This relevant bullish barrier coincides with the 23.6% Fibonacci retracement and with important highs from previous weeks. Price movements above this area could open room for the formation of a short-term bullish trend line over the next few sessions.
4,185 USD – Near-term barrier: This key neutral area aligns with the long-term bearish trend line and the 50-period simple moving average. Moves above this level could weaken the bearish structure seen in previous months. However, if price fails to move consistently away from this reference, it could continue to highlight a phase of indecision and open room for a more relevant sideways range.
3,886 USD – Critical support: This level is associated with relevant lows from October 2025 and is considered the next most important bearish barrier. Movements toward this area could once again highlight a clearer selling bias and extend the bearish trend line as the dominant technical structure over the coming trading weeks.
Written by Julian Pineda, CFA, CMT – Market Analyst
XAU/USD Current price: $ 4,038Oil prices continue to retreat as the pause in the Middle East extends. The Federal Reserve will announce its decision on monetary policy on Wednesday.XAU/USD bounced from near $4,000, holds depressed within familiar levels. Spot Gold approached the $4,000 threshold on Tuesday, easing for a second consecutive day after starting the week with a bullish gap. The XAU/USD pair traded as high as $4,116 on Monday, as a pause in back-and-forth attacks between the United States (US) and Iran weighed on Oil prices and the US Dollar (USD).
However, the Greenback quickly recovered its bullish poise, despite the continued pause in the Middle East, helped by hawkish bets ahead of the Federal Reserve (Fed) monetary policy announcement. Fed officials will announce their decision on Wednesday, and market players anticipate they will leave the benchmark interest rate unchanged at 3.50% - 3.75%. However, investors also anticipate a hawkish tone from Chair Kevin Warsh and co.
Warsh made a case for taking decisions based on data, and the latest United States (US) data has been encouraging, as inflation in the country rose by less than anticipated in June, despite still holding well above the Fed’s 2% goal. The decline was a result of the reopening of the Strait of Hormuz, resulting in plummeting Oil prices, the main factor pushing inflation higher. Hopes, however, were diluted after Iran and the US resumed tit-for-tat attacks in mid-July, dropping the Memorandum of Understanding (MoU).
Indeed, Oil prices are back in retreat mode amid a new halt in hostilities and attempts to resume negotiations. But the war is far from over and peace quite an unlikely achievement.
The Greenback came under selling pressure in the second half of the day, following the release of soft American data. Private-sector hiring in the US declined, according to the NER Pulse report, which showed that companies added an average of 15K jobs per week in the four weeks ending July 11. Also, the CB Consumer Confidence index shrank to 90.8 in July from an upwardly revised 92.2 in June. The figures helped XAU/USD bounce towards the current $4,030 price zone.
XAU/USD short-term technical outlook
In the four-hour chart, XAU/USD holds to a bearish bias as it remains capped beneath the short- and medium-term moving averages. Price sits under both the 20-period Simple Moving Average (SMA) at $4,061.52 and the 100-period SMA at $4,066.90, while also trading below the longer-term 200-period SMA at $4,106.37, which hints at a corrective phase within a broader constructive backdrop. Momentum is negative, and the Relative Strength Index (RSI) indicator near 43 leans slightly to the downside, suggesting sellers retain control in the short term despite the proximity of deeper trend support.
The daily chart shows that XAU/USD remains under clear downside pressure as spot holds below the short-term 20-day SMA at $4,073.07, while the longer-term 100-day and 200-day SMAs at $4,458.32 and $4,492.52 stay well overhead, reinforcing a bearish bias. Momentum readings back this tone, with the 14-day Momentum indicator in negative territory and the Relative Strength Index (RSI) hovering near 44, suggesting lackluster buying interest and scope for further corrective weakness while these hurdles cap the topside.
On the topside, initial resistance is aligned at the 20-period SMA around $4,061.52, with the 100-period SMA at $4,066.90 following closely above as a secondary barrier that would need to be reclaimed to ease immediate downside pressure. Next comes the O 200-period SMA near $4,106.37, followed by the weekly high at $4,116. The $4,000 mark comes as immediate support ahead of the monthly low at $3,941, with a break below the latter opening the door for a steeper decline.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The Pound trades near 1.3300 in the New York morning, effectively flat on a session that has run barely 30 pips between a floor a shade above 1.3250 and a ceiling fractionally above the 1.3300 handle. That is the narrowest daily range in weeks, and it arrives a little over a day before a Federal Reserve decision and two days before a Bank of England decision carrying a fresh Monetary Policy Report. Read More...
British Pound drops against US Dollar, Fed-BoE policy in focusThe British Pound (GBP) extends its decline against the US Dollar (USD) to near 1.3277 during the European trading session on Tuesday, the lowest level seen in over three weeks. The GBP/USD pair faces selling pressure as the US Dollar rises further, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. Read More...
British Pound softens as Fed rate uncertainty supports US DollarGBP/USD edges lower after opening at a bullish gap, remaining within positive territory and trading around 1.3290 during the Asian hours on Tuesday. The currency pair is under pressure as the US Dollar (USD) stabilizes, driven by market caution ahead of the upcoming Federal Reserve policy decision due on Wednesday. Read More...
Silver (XAG/USD) daily price chart showing a falling wedge pattern, EMA 20/50/100/200 cluster overhead, and support levels at $56.05 and $46.78. Source: TradingView The next lines of defense are the 57.35 support level and the bottom trend line of the falling wedge at around 52.98. If these levels fail to hold, that would most likely be as a result of a hawkish Fed. A dovish Fed posture projected for September, on the other hand, can help silver price to hold at these support levels and bounce above the EMAs, breaking out of the wedge into bullish territory.
What traders are really looking out for tomorrow is not the July interest rate decision, which is already priced in and wouldn’t make much of an impact. It is what the Fed Chair says tomorrow about September that can truly move the needle, as markets price an almost 80% chance of a rate hike in September, and a contrary stance from Kevin Warsh can cause volatile price movements in silver and gold.
Platinum Forecast: Can Tight Supply Offset Rate Pressure? Platinum currently trades around $1,590, close to the 1,510 support level where price bounced from in November 2025 to reach an high of about 2,517 in December, and then 2,875 in January this year.
Platinum’s price is significantly driven by a supply deficit, as mining operations are unable to meet demand, even though the demand is dwindling. The World Platinum Investment Council is projecting a fourth consecutive annual Platinum deficit in 2026 amid constrained mining efforts and higher cost of energy.
The technical read on Platinum against the U.S. dollar reveals a squeeze between the four EMAs and the support level at 1,510.
U.S. Dollar Retreats As CB Consumer Confidence Drops
DXY 280726 4h Chart U.S. Dollar Index is losing ground as traders focus on the weak CB Consumer Confidence report and react to the strong pullback in the oil markets.
CB Consumer Confidence decreased from 92.2 in June (revised from 91.2) to 90.8 in July, compared to analyst forecast of 92.3.
Today, traders also had a chance to take a look at the Case-Shiller Home Price Index report for May. The report showed that home prices increased by +1.6% on a year-over-year basis, compared to analyst consensus of +1.3%.
Oil prices pulled back by -5% amid signs of de-escalation in the Middle East. Falling oil prices pushed Treasury yields lower, which was bearish for the American currency.
Currently, U.S. Dollar Index is trying to settle below the support level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next support, which is located in the 100.50 – 100.65 range.
EUR/USD Rebounds As Oil Markets Dive EUR/USD 280726 4h Chart EUR/USD gains ground, supported by the strong sell-off in the oil markets. Falling Treasury yields provided additional support to EUR/USD. The yield of 2-year Treasuries pulled back towards the 4.26% level, while the yield of 10-year Treasuries settled below 4.60%.
EUR/USD failed to settle below the support at 1.1350 – 1.1365 and rebounded towards the 50 MA at 1.1406. In case EUR/USD settles above the 50 MA, it will get to the test of the nearest resistance level at 1.1420 – 1.1435. A move above the 1.1435 level will push EUR/USD towards the next resistance at 1.1485 – 1.1500.
GBP/USD Moves Away From Weekly Lows GBP/USD 280726 4h Chart GBP/USD is moving higher as traders focus on general weakness of the American currency.
In case GBP/USD manages to settle above the 1.3300 level, it will head towards the nearest resistance at 1.3335 – 1.3350. A move above 1.3350 will push GBP/USD towards the 50 MA at 1.3380. If GBP/USD climbs above the 50 MA, it will head towards the resistance at 1.3450 – 1.3465.
USD/CAD Pulls Back As Traders Take Some Profits Off The Table Ahead Of Fed Decision USD/CAD 280726 4h Chart USD/CAD is losing ground as traders monitor commodity markets and prepare for Fed decision, which will be released tomorrow. FedWatch Tool indicates that there is a 71.7% chance that Fed will leave the federal funds rate unchanged.
If USD/CAD stays below the 1.4100 level, it will head towards the 50 MA at 1.4073. A move below the 50 MA will push USD/CAD towards the nearest support level at 1.4010 – 1.4025.
USD/JPY Remains Stuck Below 164.00 USD/JPY 280726 4h Chart USD/JPY continues its attempts to settle above the resistance level at 163.50 – 164.00 despite falling Treasury yields. Traders ignore intraday dynamics of Treasury markets and focus on hawkish Fed policy outlook. The strong pullback in the oil markets did not provide support to the Japanese yen, which was a bearish sign for the currency.
A successful test of the resistance at 163.50 – 164.00 will push USD/JPY towards the 165.00 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
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I am already riding two EURUSD sell entries. Another possible sell opportunity could be forming for traders that are not in yet.EURUSD Possible Bearish ScenarioWatch for price to tap 4 Hour FVG (Purple) first.Watch for a bearish shift and bearish reversal signs in the FVG zone.Wait for all above to play out first then plan the sell entry, stops and targets with confidence.If price continues higher and breaks above the July 27 2026 high then trade setup is cancelled and if price breaks below the July 27 2026 low without tapping the 4H FVG then trade setup is cancelled.EURUSD 15 minute chart July 27 2026
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup. We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFXAt Elliottwave-Forecast we cover 78 instruments (Forex, Commodities, Indices, Cryptos, Stocks and ETFs) in 4 different time frames and we offer 5 Live Session Webinars everyday. We do Daily Technical Videos, Elliott Wave Trade Setup Videos and we have a 24 Hour Chat Room. Our clients are always in the loop for the next market move.
Silver (XAG/USD) trades around $57.40 on Tuesday at the time of writing, down 1.71% on the day. The white metal is under pressure as the US Dollar (USD) regains some strength and investors reduce their exposure to safe-haven assets ahead of the Federal Reserve's (Fed) monetary policy decision.
Market sentiment improves following the latest comments from US President Donald Trump, who says the United States (US) is holding "good talks" with Iran. The US President also says he wants to avoid targeting critical infrastructure such as power plants and bridges, while warning that Iran can no longer break agreements. These remarks fuel hopes of a de-escalation in the Middle East conflict, contributing to lower Oil prices and easing concerns over renewed inflationary pressures.
Despite the improvement in geopolitical sentiment, risks have not disappeared completely. Donald Trump warns that US military strikes could resume if negotiations fail, while several security incidents reported in Saudi Arabia, Jordan and Iraq highlight that regional tensions remain elevated.
Investors are also digesting several US economic releases published on Tuesday. The Conference Board Consumer Confidence Index eased to 90.8 in July from 92.2 previously, reflecting a slight deterioration in household sentiment. Meanwhile, the four-week average of the Automatic Data Processing (ADP) NER Pulse report shows that private-sector job creation slowed to just 15K jobs per week in mid-July, confirming a gradual cooling in the labor market.
Attention now turns to the Fed's policy decision on Wednesday. Markets widely expect policymakers to leave interest rates unchanged, but investors will closely monitor the central bank's statement and comments from Fed Chair Jerome Powell for fresh clues on the future path of monetary policy.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
USD/CAD traded near 1.4100 on Tuesday as traders awaited the Federal Reserve's policy decision. Falling crude oil prices continued to limit gains for the Canadian dollar despite a softer US dollar. Markets are also monitoring US-Iran negotiations, which have weighed on oil prices and the loonie's outlook. The USD/CAD pair edged lower on Tuesday, trading around 1.4100, as investors avoided taking aggressive positions ahead of the Federal Reserve’s interest rate decision. While the US dollar softened slightly after recent gains, the Canadian dollar’s upside remained constrained by weaker crude oil prices, leaving the currency pair close to its highest levels of the month.
Markets widely expect the Federal Reserve to leave interest rates unchanged, shifting investors’ focus to the central bank’s updated economic projections and Fed Chair Kevin Warsh’s comments for clues on the timing of future policy easing.
Why Is USD/CAD Falling Today? The modest decline in USD/CAD reflects a slight pullback in the US dollar rather than renewed strength in the Canadian dollar. Traders are reducing positions ahead of the Fed announcement, with markets reluctant to make large directional bets before policymakers provide fresh guidance on inflation, economic growth and interest rates.
However, the loonie continues to face headwinds from the energy market, limiting the pair’s downside.
Oil Prices Continue to Pressure the Canadian Dollar West Texas Intermediate (WTI) crude fell to a fresh weekly low after reports that the United States and Iran continue negotiations aimed at preserving the current ceasefire despite recent violations.
Lower oil prices typically weigh on the Canadian dollar because Canada is one of the world’s largest crude exporters. As energy prices decline, expectations for export revenues and economic activity also weaken, reducing demand for the loonie.
The latest move in crude has therefore offset much of the benefit the Canadian dollar might otherwise have gained from the softer US dollar.
All Eyes Turn to the Federal Reserve Investors now await Wednesday’s Federal Reserve policy announcement, where officials are widely expected to leave interest rates unchanged.
Instead, markets will focus on the Fed’s economic outlook and Chair Kevin Warsh’s press conference for signals on whether policymakers are becoming more comfortable with future rate cuts. A more hawkish tone could strengthen the US dollar and push USD/CAD higher, while dovish guidance may allow the Canadian dollar to recover some recent losses.
USD/CAD Price Analysis USD/CAD is trading near 1.4100 after retreating from July’s highs above 1.4200. Despite the latest pullback, the broader trend remains constructive, with the pair continuing to trade above its recent breakout zone.
Immediate support is seen around 1.4000, a level that has repeatedly attracted buyers in recent sessions. A break below that level could expose 1.3960. On the upside, resistance lies at 1.4160, followed by the recent high near 1.4240. As long as USD/CAD holds above the 1.4000 support zone, buyers are likely to retain the near-term advantage.
USD/CAD Outlook The near-term outlook remains balanced ahead of the Federal Reserve meeting. While weaker oil prices continue to pressure the Canadian dollar, traders are unlikely to establish significant new positions until the Fed provides greater clarity on the direction of US monetary policy.
For now, USD/CAD appears to be consolidating within its recent range, with the next major move likely to be driven by the Fed’s policy statement and developments in global energy markets.
Why is USD/CAD falling today?
USD/CAD is edging lower as traders reduce US dollar positions ahead of the Federal Reserve’s interest rate decision, although falling oil prices continue to limit gains for the Canadian dollar.
Why do oil prices affect the Canadian dollar?
Canada is a major oil exporter. Higher crude prices generally support the Canadian dollar by improving export revenues, while lower oil prices tend to weaken the currency.
What are the key levels for USD/CAD?
Immediate support is located near 1.4000, while resistance is seen around 1.4160 and the recent July high near 1.4240.
Commerzbank’s Carsten Fritsch and Thu Lan Nguyen note that the Gold price has dropped nearly 30% from its January record as higher real yields and hawkish Federal Reserve expectations weigh on the metal. The bank cuts its year-end Gold forecast to USD 4,500 per troy ounce, but still projects a move to USD 5,000 by end-2027 if Fed rates stay unchanged and later fall.
Forecast cut but recovery seen later"We are lowering our year-end gold price forecast to USD 4,500 per troy ounce (previously: USD 4,800). This reflects the significant fall in prices, which can be attributed to the Fed adopting a more hawkish stance than expected."
"Nevertheless, there is potential for the gold price to recover from its current level, as we consider current market expectations of Fed rate hikes to be excessive and anticipate that Fed interest rates will remain unchanged until the end of the year."
"In this scenario, the Fed would likely refrain from raising interest rates and might even cut its key interest rate from mid-2027 onwards, as the 2% target would then be reached in spring 2027. This provides scope for a further price increase next year to USD 5,000 per troy ounce by the end of 2027 (previous forecast: USD 5,200)."
"However, without a reversal in interest rate expectations, a lasting return of ETF investors and a recovery in the gold price are unlikely."
"As long as this remains the case, gold is unlikely to benefit disproportionately from increased demand for safe havens."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Gold trades near $4,020 in the New York morning, down roughly 1.4% on a session that started near $4,075 and never built a bid. The slide ran straight through a global equity shock that should have been the strongest advertisement for the metal in months, and the day's low printed just above the $4,000 handle instead.
A fear trade that skipped the fear assetThe damage overnight was concentrated in Asia, where Korean shares fell almost 11% as the two largest memory makers there dropped double digits, the Nikkei 225 gave up close to 4% and the regional benchmark fell 3%. Renewed scepticism about the returns on artificial intelligence spending did the work. Money moved into safety, and it moved into government bonds and the Dollar rather than into bullion.
The Dollar Index sits near 101.50 at a one-month high and the Dollar trades just short of 164.00 against the Yen. Treasury yields eased on the equity move, which ordinarily supports an asset that pays no coupon. Gold fell anyway, which says the bid for protection is being expressed in currency and duration and not in metal.
The other bid the metal has lost is the war, and the pause in that war is now four days old. American strikes on Iran are on hold for a fourth day, with Washington claiming Tehran asked for the pause and Tehran denying any negotiation is under way beyond talks with Oman on safe passage. Shipping through the Strait of Hormuz still runs at fewer than 10 vessels a day against roughly 100 before the conflict, so the chokepoint remains shut in practice while the price behaves as though it is open.
One variable, and it reports on WednesdayThe metal has spent July trading a single input, and that input reports at 18:00 GMT on Wednesday. The hike tail for this meeting has been pinned near 36% since the middle of last week, unmoved by the stand-down in the Gulf and by a 7% break in Crude Oil, with at least one increase roughly 80% priced by September and no cut anywhere on the 2026 curve.
June's inflation print did the rest of the damage, and the arithmetic behind it is not subtle. Headline at 3.5% YoY against an upper bound of 3.75% flipped the real policy rate back to positive after two months underwater, and core at 2.6% widens that gap to more than a full point. A metal that pays nothing cannot argue with a policy rate that might rise and will not fall.
The owners changed, and the story did notJune fund flows explain the shape of this tape better than any headline does. Physically backed exchange-traded products shed roughly 8.9 billion Dollars over the month per World Gold Council data, cutting holdings by 74 tonnes to just above 4K tonnes, with the bulk of the exit in North America as investors chased yield elsewhere. The first half still ran positive at roughly 8 billion Dollars of net inflows, and Asian funds took a record 12 billion Dollars of that.
That regional split explains a tape that neither breaks down nor recovers. Western allocators sell the metal when real rates rise, and Asian buyers accumulate it for reasons that have nothing to do with the next Federal Reserve meeting. The result is a floor just under $3,950 that keeps holding while every rally since June dies beneath the moving averages, with a drawdown of roughly 28% from January's record near $5,600 producing no capitulation at all.
The data the metal has to surviveWednesday's decision arrives without a fresh set of projections, so the statement language and the press conference at 18:30 GMT carry the entire signal. Thursday brings the June core Personal Consumption Expenditures price index at 12:30 GMT, with consensus at 0.2% MoM and 3.3% YoY against 0.3% and 3.4% previously, alongside the first estimate of second-quarter Gross Domestic Product at 2.1% annualized and jobless claims at 200K against 187K.
The American evidence this week has been soft and the metal has not been paid for it. The four-week average of private hiring slowed again to 15K from 16.25K, and July confidence moderated to 90.8 against expectations nearer 92, with the present situation index weaker for a third consecutive month and the expectations component still beneath the 80 line historically associated with recession risk. Soft data buys Gold only when it buys rate cuts, and it no longer buys rate cuts.
Technical levelsResistance: The session ceiling near $4,075 is the first line, with the $4,150 area that has capped every attempt this month above it, and the 50-day Exponential Moving Average (EMA) near $4,200 marking the structural cap after crossing beneath the 200-day near $4,300 earlier in July.
Support: The $4,000 handle is the only level that matters into the decision, and beneath it the late-June low just under $3,950 is the floor of the entire summer range.
Bias: Bearish. Rallies into $4,075 are for selling while both averages decline overhead, with the $4,000 handle and then $3,950 as objectives, and the daily Stochastic Relative Strength Index near 63 leaves room beneath. A daily close above $4,150 invalidates.
XAU/USD daily chart
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
TD Securities strategists argue that the Swiss Franc’s (CHF) underperformance since the February 2026 Iran shock reflects both low-yield carry dynamics and sensitivity to Gold prices. With the Swiss National Bank (SNB) expected to keep policy on hold and sight deposits muted, they see global rate paths and commodities as key drivers for Swiss Franc (CHF) crosses, limiting further sustained CHF weakness.
SNB on hold leaves CHF to globals"Since the Iran shock at the end of February 2026, CHF has become one of the worst-performing global currencies along with SEK. Risk-off sentiment only supported CHF briefly in the first half of March, before a downtrend ensued."
"CHF has always been a low-yielding currency, but FX carry did not always drive CHF weaker. In fact, during the last global rate hiking cycle of 2022, when rate differential widened in favor of global currencies against CHF, CHF broadly rallied on the back of falling SNB sight deposits. Sight deposits have shown a muted change in 2026, which has allowed macro variables to dictate the direction of EUR/CHF. With the SNB likely to keep the policy rate on hold in the foreseeable future, rate paths for global central banks will matter more for CHF-crosses."
"CHF has been one of the worst-performing global currencies since the Iran shock in 2026. While CHF bears have been awakened with FX market participants largely attributing CHF weakness to carry, we find falling gold price also matters. The EUR/CHF rally could end if ECB pauses rate hikes after September; falling gold prices will be a prerequisite for CHF to stay weak."
"In the scenario that the ECB keeps policy rate on hold after one more hike in September, the EU-SZ rate differential would likely see its peak, and further gold selloff will be needed for the CHF to stay weak, in our view. In commodities, our research suggests gold prices could fall to $3,900/oz in the near-term before recovering into a new uptrend. As we see limited scope for a prolonged global rate hiking cycle and only modest gold price downside, our FX forecast has EUR/CHF staying around 0.93 into year-end 2026."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Death Cross Signals Technical Downward Pressure With that being the situation that we find ourselves in, we probably have to keep an eye on the headlines, the interest rate markets in the United States, and the value of the US dollar, which is typically a reaction to the interest rates in America. With the recent death cross, the 50-day EMA dropping below the 200-day EMA, it opens up the possibility that longer-term technical traders are probably going to add more downward pressure.
Ultimately, this is a market that, given enough time, probably has to make a bigger decision, but as things stand right now, I think everybody is in a bit of a holding pattern. The price action certainly seems to suggest this as being the case.
Gold hovers at 4,032, capped by its declining EMAs above 4,000. Source: TradingView The gold market has fallen early during the trading session on Tuesday as we continue to see elevated interest rates causing a little bit of chaos. At this point in time, the market will continue to look at the $4,000 level as potential support that extends down to the $3,900 level. Breaking below the $3,900 level could open up significant selling pressure, but based on the recent action, it does seem like there are a lot of buyers in that region. This is an area that I think will continue to attract a lot of attention.
Gold continues to move based on inflationary concerns, the US dollar, interest rates, etc., which are all being driven by the Middle East. It does make a certain amount of sense that gold continues to go sideways at this point because, quite frankly, everybody is probably feeling a little stuck. This is a problem for people looking to take advantage of a trend, which is difficult to find in gold at the moment.
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The US dollar continues to flex its muscles early on Tuesday.
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EUR/USD Technical Analysis
EUR/USD drops to 1.1362, breaking below its range and EMAs. Source: TradingView The Euro has gone back and forth during the course of the trading session here on Tuesday as we continue to hang on by a thread. We are at the bottom of a recent consolidation area, and I do think at least at this point in time there are a lot of questions to ask when it comes to the Euro. Interest rates in America will be a big driver typically of this currency pair, and despite the fact that rates have drifted a little bit lower, they are still uncomfortably high, and there are concerns in the Middle East, which has a major influence on that as well.
The recent area of consolidation could be in the process of trying to form a double bottom; we’ll just have to wait and see. Short-term rallies will more likely than not continue to be swimming upstream if recent history is to be believed.
GBP/USD Technical Analysis
GBP/USD slips to 1.3279, drifting below its EMAs near 1.33. Source: TradingView The pound initially tried to rally but then gave back gains as the market is still hanging around the 1.33 level. This is with elevated US rates. There are concerns in the Middle East, and sometimes traders will run to the US dollar in times of concern. It is possible that’s what’s going on here. The market is likely to continue to be noisy, but it has decidedly turned bearish over the last couple of weeks.
USD/CHF Technical Analysis USD/CHF grinds higher to 0.8198, breaking out above its EMAs. Source: TradingView And the US dollar continues to grind higher against the Swiss Franc. The positive swap differential favors the US dollar as traders continue to see value in the greenback. We had recently consolidated and now have broken out of that little consolidation range to show increasing bullish pressure.
The market is typically one that’s very choppy and somewhat sideways, and more of a grind even when it does trend, so patience is something that I typically find I have to employ here against the Franc. But getting paid at the end of every day is a huge bonus here with that positive swap, and right now I think that is one of the main drivers.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
NZD/USD trades around 0.5770 on Tuesday at the time of writing, slightly lower on the day. The New Zealand Dollar (NZD) remains pressured by the firm US Dollar (USD), which continues to benefit from safe-haven demand amid persistent geopolitical tensions.
Markets remain focused on developments in the Middle East. The United States (US) has paused its military campaign against Iran after nearly two weeks of strikes, while US President Donald Trump said that talks with Tehran were progressing and that a diplomatic resolution remained possible. However, optimism has been frayed after reports of drone attacks in Saudi Arabia, Jordan and Iraq. Trump also warned that US strikes could resume if negotiations fail, helping the US Dollar retain its safe-haven appeal.
Investors are nevertheless reluctant to place aggressive bets ahead of the two-day Federal Reserve (Fed) policy meeting, which begins later on Tuesday. The US central bank is widely expected to leave interest rates unchanged on Wednesday, but markets will closely watch the policy statement and Fed Chair Kevin Warsh's press conference for fresh clues on the future path of monetary policy.
Meanwhile, the latest labor market data continue to point to a cooling US employment picture. The Automatic Data Processing (ADP) NER Pulse report showed that private employers added an average of 15K jobs per week over the four weeks ending July 11, down from 16.5K previously. Despite this further moderation in hiring, the US Dollar maintains a bullish tone, with the US Dollar Index (DXY) holding close to its yearly highs.
In New Zealand, expectations that the Reserve Bank of New Zealand (RBNZ) could deliver another interest rate hike in September may help limit downside pressure on the New Zealand Dollar against the Greenback.
New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Australian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%-0.01%0.08%-0.07%0.31%0.07%0.08%EUR-0.03%-0.04%0.06%-0.13%0.27%0.03%0.05%GBP0.00%0.04%0.09%-0.05%0.32%0.08%0.11%JPY-0.08%-0.06%-0.09%-0.16%0.22%-0.03%0.02%CAD0.07%0.13%0.05%0.16%0.40%0.12%0.17%AUD-0.31%-0.27%-0.32%-0.22%-0.40%-0.23%-0.23%NZD-0.07%-0.03%-0.08%0.03%-0.12%0.23%0.05%CHF-0.08%-0.05%-0.11%-0.02%-0.17%0.23%-0.05% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
The British Pound (GBP) extends its decline against the US Dollar (USD) to near 1.3277 during the European trading session on Tuesday, the lowest level seen in over three weeks. The GBP/USD pair faces selling pressure as the US Dollar rises further, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.06%0.11%-0.12%0.35%0.09%0.03%EUR-0.03%0.03%0.09%-0.13%0.32%0.08%0.00%GBP-0.06%-0.03%0.07%-0.15%0.31%0.06%0.00%JPY-0.11%-0.09%-0.07%-0.23%0.24%-0.01%-0.05%CAD0.12%0.13%0.15%0.23%0.49%0.20%0.17%AUD-0.35%-0.32%-0.31%-0.24%-0.49%-0.23%-0.32%NZD-0.09%-0.08%-0.06%0.00%-0.20%0.23%-0.05%CHF-0.03%-0.01%0.00%0.05%-0.17%0.32%0.05% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
In European trade, the US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, posts a fresh monthly high at 101.64.
According to the CME FedWatch tool, traders see a 62% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75% in the policy announcement on Wednesday. Investors will closely track the policy announcement and Fed Chairman Kevin Warsh’s press conference to know whether the central bank’s decision will lean towards United States (US) President Donald Trump’s economic agenda.
On Monday, US President Trump urged Fed Chair Warsh to lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.
On the Pound Sterling front, investors await the Bank of England’s (BoE) monetary policy announcement on Thursday. The BoE is expected to leave interest rates unchanged at 3.75%, with a 7-2 majority. The major focus of financial markets will be on commentary on inflation and the economic outlook.
Economic Indicator Fed Interest Rate Decision The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
The Euro (EUR) is failing to draw any significant support from the truce in the Middle East and the lower Oil prices and keeps heading south against the US Dollar (USD) on Tuesday. EUR/USD bears are testing fresh one-month lows below 1.1360, drawing near the year-to-date low of 1.1324.
Market optimism about a negotiated end of the US-Iran conflict and the 12% decline in Brent Oil prices have triggered a mild appetite for risk during the European session, with European stock markets showing marginal gains following a negative session in Asia.
Risk appetite, however, has not translated into a weaker US Dollar this time, as traders cling to hopes that the Federal Reserve (Fed) might deliver a surprise rate hike later this week. Futures markets are pricing a 35% chance of a 25 basis point hike on Thursday, up from 25% a week ago, according to data by the CME Group’s FedWatch Tool, underpinning support for the US Dollar, which has reached fresh monthly highs against a basket of currencies.
Technical Analysis: Below 1.1324, the next target is the 1.1245 area
EUR/USD trades at 1.1362, holding a mild bearish trend, after being rejected at the 1.1420 area on Monday, with price action approaching year-to-date lows. The 4-hour Relative Strength Index (14) is pulling lower from the neutral 50 line, and the Moving Average Convergence Divergence (MACD) has entered negative levels although it remains near zero. Momentum is flat to slightly bearish, rather than impulsively directional so far.
If the pair confirms below the bottom of the monthly channel at 1.1360, bears are likely to be tempted by the 2026 trading floor of 1.1324. Below here, the area between the 127.2% Fibonacci extension of the June 17-24 sell-off, at 1.1245, and the late May 2025 low, at 1.1210, emerges as the next target.
On the topside, Monday's high, at 1.1420, and the top of the monthly range at 1.1480 are the key levels to breach to ease bearish pressure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold (XAU/USD) trades on the back foot on Tuesday, pressured by a firmer US Dollar (USD), even as Oil prices extend their pullback on hopes of an end to the US-Iran war. At the time of writing, XAU/USD trades around $4,027, down 1.20% on the day, after failing to sustain gains above $4,100 on Monday.
US President Donald Trump said on Monday that the two sides were having “good talks” and that there was a “good chance something will happen,” but warned that military action could resume if negotiations fail. Iran denied holding direct talks with the United States.
Meanwhile, Oman presented Iran with a proposal for the joint management of the Strait of Hormuz through “voluntary fees,” under which Iran would not have sole control of the key shipping route.
Oil prices have erased all the gains recorded last week, with West Texas Intermediate (WTI) trading around $80.30, extending its decline for a third consecutive day. Despite the sharp pullback, Oil prices remain elevated and continue to fuel inflation concerns.
While the US-Iran war stays at the forefront, attention is also turning to the Federal Reserve’s (Fed) interest-rate decision on Wednesday, which carries an unusually high risk of a surprise rate hike.
The Fed is widely expected to keep the federal funds rate unchanged at 3.50%-3.75%. However, according to the CME FedWatch Tool, traders price in around a 35% chance of a 25-basis-point (bps) increase.
Hawkish bets have strengthened since Fed Chair Kevin Warsh led his first policy meeting in June. Warsh has repeatedly stressed the need to restore price stability as inflation runs above the 2% target.
Will $4,000 hold or break?For Gold, the upcoming Fed decision could prove pivotal in determining whether the $4,000 support holds or gives way to a deeper corrective decline.
A surprise rate hike would put Gold at risk of falling below $4,000. Higher borrowing costs typically weigh on non-yielding assets while boosting the US Dollar and US Treasury yields.
The base case is a hawkish hold, with the Fed leaving rates unchanged while keeping the door open to an increase later this year as energy-driven inflation risks persist without a lasting resolution to the US-Iran war. Such an outcome could also leave Gold vulnerable to a break below $4,000.
Meanwhile, if the Fed adopts a less hawkish stance and views the energy shock as temporary, traders may scale back rate-hike bets. That could weaken the US Dollar and help Gold hold above the $4,000 support.
Technical analysis: Bears retain control below middle Bollinger Band
On the daily chart, XAU/USD maintains a mildly bearish near-term bias as it trades below the 20-day Simple Moving Average (SMA) at around $4,072, which also represents the middle Bollinger Band.
The band structure shows spot trading in the lower half of the envelope, while the Relative Strength Index (RSI) at 43.42 stays below the neutral 50 level, suggesting that recovery attempts lack strong momentum within a still‑pressured trend backdrop flagged by an Average Directional Index (ADX) near 32, which signals persistent but moderating trend strength.
On the topside, initial resistance emerges at the Bollinger middle band and 20‑day SMA near $4,072, followed by the upper band around $4,179, where sellers could reassert control if tested.
On the downside, immediate support is seen at the psychological $4,000 handle, ahead of the lower Bollinger band near $3,964. A daily close below this latter floor would expose deeper losses and reinforce the prevailing bearish bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Gold fell to 4,047 USD per ounce on Tuesday, erasing gains from the previous session. Pressure on the metal is mounting amid fears that the Federal Reserve may raise rates as early as this week.
Markets currently estimate the probability of such a move on Wednesday at over 33% – an unusually high level of uncertainty for the period immediately preceding a central bank meeting.
Investors speculate that a rate hike would allow Fed Chairman Kevin Warsh to reaffirm his commitment to fighting inflation, following repeated promises to restore price stability.
The Fed meeting begins today and concludes on Wednesday evening with a rate decision and accompanying comments.
Additional pressure on gold came from falling oil prices after Donald Trump spoke of “good negotiations” with Iran. This eased inflation concerns, although the US President warned of a readiness to resume strikes if talks fail.
Technical Analysis
On the H4 XAU/USD chart, the market formed a consolidation range around the 4,110 USD level and, following a downside breakout, completed a downward move to 4,036 USD. A consolidation range is now forming around this level. A move lower towards 3,940 USD is expected. The MACD indicator confirms ongoing downside momentum, with its signal line above the centre line and turning lower.
On the H1 chart, the market broke below the 4,090 USD level and then moved lower to 4,036 USD. A correction towards 4,070 USD is expected next, with a wide consolidation range forming around this level. The Stochastic oscillator confirms this scenario, with its signal line above 20 and pointing upwards towards 50, indicating the potential for a short-term corrective rebound.
Conclusion Gold has come under pressure as markets brace for a potential Federal Reserve rate hike this week, with the probability of a move on Wednesday exceeding 33% – an unusually high level of pre-meeting uncertainty. Investors believe a hike would signal Chairman Warsh’s renewed commitment to tackling inflation. The Fed meeting gets underway today, with the rate decision due tomorrow. Further pressure came from falling oil prices following Trump’s comments on “good negotiations” with Iran, which temporarily eased inflation concerns despite the risk of renewed strikes. Technically, gold appears poised for further downside towards 3,940 USD, with any recovery likely to be capped by the Fed’s policy outlook. The central bank’s decision and forward guidance will be the key catalysts for gold’s near-term direction.
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/ / Risk-off sentiment is weighing on AUD/USD ahead of Australia's CPI report and the FOMC meeting. Here's what traders should be watching.
28/07/2026
7/28/2026 7:47:00 AM
The Australian dollar is trading on the back foot after a sharp selloff in Asian technology stocks dented risk appetite and dragged regional currencies lower.
With Australia's CPI report due next and the FOMC decision following shortly after, traders face two major macro events that could determine whether AUD/USD extends its recent pullback or regains upside momentum. At the same time, futures positioning, market sentiment and several technical levels suggest the pair may be approaching an important inflection point.
View related analysis:
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Gold fell to 4,047 USD per ounce on Tuesday, erasing gains from the previous session. Pressure on the metal is mounting amid fears that the Federal Reserve may raise rates as early as this week.
Markets currently estimate the probability of such a move on Wednesday at over 33% – an unusually high level of uncertainty for the period immediately preceding a central bank meeting.
Investors speculate that a rate hike would allow Fed Chairman Kevin Warsh to reaffirm his commitment to fighting inflation, following repeated promises to restore price stability.
The Fed meeting begins today and concludes on Wednesday evening with a rate decision and accompanying comments.
Additional pressure on gold came from falling oil prices after Donald Trump spoke of "good negotiations" with Iran. This eased inflation concerns, although the US President warned of a readiness to resume strikes if talks fail.
Technical analysis
On the H4 XAU/USD chart, the market formed a consolidation range around the 4,110 USD level and, following a downside breakout, completed a downward move to 4,036 USD. A consolidation range is now forming around this level. A move lower towards 3,940 USD is expected. The MACD indicator confirms ongoing downside momentum, with its signal line above the centre line and turning lower.
On the H1 chart, the market broke below the 4,090 USD level and then moved lower to 4,036 USD. A correction towards 4,070 USD is expected next, with a wide consolidation range forming around this level. The Stochastic oscillator confirms this scenario, with its signal line above 20 and pointing upwards towards 50, indicating the potential for a short-term corrective rebound.
ConclusionGold has come under pressure as markets brace for a potential Federal Reserve rate hike this week, with the probability of a move on Wednesday exceeding 33% – an unusually high level of pre-meeting uncertainty. Investors believe a hike would signal Chairman Warsh's renewed commitment to tackling inflation. The Fed meeting gets underway today, with the rate decision due tomorrow. Further pressure came from falling oil prices following Trump's comments on "good negotiations" with Iran, which temporarily eased inflation concerns despite the risk of renewed strikes. Technically, gold appears poised for further downside towards 3,940 USD, with any recovery likely to be capped by the Fed's policy outlook. The central bank's decision and forward guidance will be the key catalysts for gold's near-term direction.
Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data. Silver trades at $57.53 per troy ounce, down 1.49% from the $58.40 it cost on Monday.
Silver prices have decreased by 19.07% since the beginning of the year.
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 70.27 on Tuesday, up from 69.81 on Monday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
TL;DR: RBA Governor Michele Bullock has reframed Wednesday’s Q2 CPI report — the question isn’t whether core inflation is elevated, but whether it’s hot enough above 3.8% to justify an August RBA hike, with AUD/USD stalled at resistance ahead of the release.
Why This CPI Report Matters Australia’s Q2 CPI report is shaping up as the defining domestic event before the Reserve Bank of Australia’s August 11 meeting. But Governor Michele Bullock may have already reframed how markets should interpret the numbers. The issue isn’t whether the RBA retains a tightening bias — it clearly does. The more important question is whether, after three rate hikes this year and a pause in June, there’s any pressing need to tighten again immediately.
Unless Wednesday’s inflation data delivers a meaningful upside surprise, Bullock’s latest remarks suggest policymakers are comfortable giving previous rate increases more time to work.
What Bullock Actually Signaled In a speech today, Bullock left little doubt that another hike remains on the table, stating the Board is “prepared to act as required to achieve its mandate, including by increasing the cash rate further if needed.” Yet that statement was balanced by a more nuanced read on current conditions — she noted that underlying inflation has evolved broadly as expected since May, while acknowledging both housing activity and the labor market have softened more than the RBA had anticipated.
Those developments matter because they point to monetary policy exerting greater restraint on demand than the Bank itself expected only months ago. In other words, Bullock didn’t dilute the tightening bias — she signaled the urgency to use it has diminished.
The Number That Actually Matters: 3.8% That distinction makes Wednesday’s CPI report less about whether inflation remains elevated and more about whether it’s sufficiently stronger than expected to justify acting again in August. The quarterly trimmed mean inflation measure remains the RBA’s preferred guide, with consensus looking for a 0.9% qoq increase after 0.8% previously — lifting the annual pace from 3.6% to 3.7%.
That would mark a fourth consecutive quarterly reading within the 0.8%–1.0% range, confirming underlying inflation remains stubbornly sticky. Critically, it would still sit just below the RBA’s own May Statement on Monetary Policy forecast of 3.8% yoy — and that comparison may matter more than the consensus figure itself:
A print at or above 3.8% would suggest inflation is running hotter than the RBA anticipated, restoring a pressing case for an August hike A print around 3.7% or lower would reinforce Bullock’s view that inflation is evolving as expected, giving the Board little incentive to tighten immediately Headline CPI is expected to rise just 0.7% qoq after 1.4% in Q1, with annual inflation holding at 4.1% thanks to lower fuel prices — comfortably below the RBA’s own May baseline forecast of 4.8%, leaving the policy focus squarely on the trimmed mean.
ActionForex’s Technical View on AUD/USD The rebound from the 0.6864 short-term low has stalled at a key resistance zone: the 55-day EMA (now at 0.7008) and the 38.2% retracement of 0.7277 to 0.6864, at 0.7022.
Three Factors Capping the AUD/USD Rally AUD/USD is facing three headwinds limiting its rally:
Receding RBA hike expectations — Bullock’s tone suggests policymakers are in no rush to tighten again immediately. Elevated Fed rate-hike expectations — a residual effect of the oil shock rather than its current direction. Brent has fallen sharply this week on the US-Iran pause, but at $83–88 it remains well above July’s $70 low, and the month’s spike toward $100+ has left markets pricing meaningfully higher odds of a September Fed hike than two weeks ago. The drag on AUD/USD isn’t where oil trades today — it’s what the month’s move has already done to rate expectations. Deteriorating risk appetite — regional technology stocks continue to struggle, weighing on the Australian Dollar. The KOSPI lost 10.84% today while the Nikkei fell 3.95% as markets reacted to concerns over Nvidia’s “circular financing” model. What Happens Next: CPI, the Fed, and the Path for AUD/USD A stronger-than-expected Q2 CPI print tomorrow might give AUD/USD a brief bounce. But that momentum won’t sustain unless the other two factors resolve. More importantly, the Fed rate decision also lands tomorrow, and a hawkish FOMC vote could easily overturn any CPI-driven boost.
On the other hand, a weaker-than-expected CPI report — or even an in-line print — could finally bring sellers in and push AUD/USD decisively through the 0.6964 minor support and the near-term rising channel floor. That would strongly argue the rebound from 0.6864 has completed as a corrective bounce, with a retest of the 0.6864 low likely next and the broader downtrend from 0.7277 poised to resume.
Key Takeaways The critical CPI threshold is 3.8% yoy trimmed mean — at or above revives August hike odds; at or below 3.7% supports an RBA pause Bullock’s tone suggests the RBA’s tightening bias is intact, but urgency to act again immediately has diminished AUD/USD is capped by three factors: fading RBA hike bets, lingering Fed hawkishness from the oil spike, and risk-off pressure from Asian tech selloffs Wednesday’s Fed decision could overturn any CPI-driven AUD/USD bounce regardless of the print A break below 0.6964 would confirm the rebound from 0.6864 as corrective, opening a retest of that low and a resumption of the downtrend from 0.7277
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
USD/CHF continues to grind higher, with the technical picture pointing to 0.8400 as the next major resistance level.
That area is significant for more than one reason. It coincides with the 127.2% Fibonacci extension of the recent recovery leg and also aligns closely with the 50% Fibonacci retracement of the broader decline from the January 2025 high to the January 2026 low. With two key Fibonacci levels converging in the same region, 0.8400 becomes an important technical hurdle.
The move also fits the improving fundamental backdrop for the pair. Reports suggesting the Swiss National Bank could keep rates at 0.00% through 2027 reinforce the case for a softer Swiss franc, while higher US yields continue to underpin the US dollar.
A sustained break above 0.8400 would strengthen the bullish outlook and could open the door to a move towards the 161.8% Fibonacci extension near 0.8500. Until then, traders should watch how price reacts at this confluence zone, where profit-taking and fresh selling interest may emerge.
Silver (XAG/USD) trades around $57.55 on Tuesday at the time of writing, down 1.45% on the day, as investors remain cautious ahead of the Federal Reserve's (Fed) monetary policy decision. A rebound in the US Dollar (USD) is also limiting demand for the white metal, despite an uncertain geopolitical backdrop.
Markets continue to assess the latest developments in the Middle East. US President Donald Trump said that the United States (US) is holding "good talks" with Iran in an effort to resolve the regional conflict. The prospect of de-escalation is weighing on Oil prices, easing concerns about renewed inflationary pressures and reducing expectations of a near-term interest rate hike.
However, Donald Trump also warned that US military strikes could resume if negotiations fail. Meanwhile, several security incidents reported in Saudi Arabia, Jordan and Iraq highlight that tensions remain elevated, while disruptions to shipping through the Strait of Hormuz continue to pose risks to global energy markets.
Investors are now turning their attention to this week's Federal Reserve (Fed) meeting. Markets widely expect policymakers to leave interest rates unchanged, although a minority of market participants still see a possibility of an immediate rate hike. The prevailing scenario remains that any potential rate increase would be postponed until September, while the central bank's guidance will be closely watched for fresh clues on the future path of monetary policy.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Goldman Sachs sees scope for AUD/NZD to retreat over the medium term as stronger New Zealand inflation revives RBNZ rate-hike expectations, despite near-term support from higher energy prices. Analysts at Goldman Sachs expect the Australian Dollar to New Zealand Dollar exchange rate (AUD/NZD) to correct lower over the medium term, although higher energy prices may continue to support the cross in the immediate outlook.
AUD/NZD was trading around 1.2098 on Monday, up approximately 0.3% on the day. The pair has fallen around 0.7% since the beginning of July but remains more than 4% higher in 2026.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.907748 (+0.30%)
Pound to Dollar (GBP/USD): 1.330182 (+0.09%)
Australian Dollar to US Dollar (AUD/USD): 0.697252 (-0.20%)
The bank said AUD/NZD has recently been “buoyed up” by the rise in global energy prices, reflecting Australia’s more favourable commodity exposure and the relative resilience of the Australian Dollar during periods of higher raw-material costs.
Goldman nevertheless believes that monetary-policy developments in New Zealand could ultimately place renewed downward pressure on the cross.
New Zealand inflation surprised firmly to the upside, with consumer prices rising 1.5% quarter-on-quarter and annual inflation accelerating to 4.1%.
The stronger reading has led Goldman Sachs to revise its Reserve Bank of New Zealand outlook. The bank now expects the RBNZ to raise interest rates in September, followed by a final 25-basis-point increase in December.
That would take the Official Cash Rate to 3.00%, creating a stronger rate backdrop for the New Zealand Dollar and narrowing one of the key sources of support for AUD/NZD.
The shift is important because the cross has spent much of 2026 benefiting from a widening contrast between expectations for Australian and New Zealand monetary policy.
Stronger New Zealand inflation now challenges that narrative by increasing the likelihood that the RBNZ will need to tighten policy further to prevent price pressures becoming entrenched.
Australian inflation data will provide the next major test for the outlook.
A stronger-than-expected Australian CPI reading could reinforce expectations that the Reserve Bank of Australia will also need to maintain a restrictive policy stance, potentially extending near-term support for the Australian Dollar.
Energy prices remain another source of uncertainty. Australia is a major commodity exporter, meaning higher energy and raw-material prices can improve the country’s terms of trade and support the currency.
This helps explain why Goldman is cautious about expressing its bearish AUD/NZD view through a short-dated trade.
Medium-Term AUD/NZD Forecast: Goldman Prefers Longer-Dated Puts Rather than betting on an immediate decline, Goldman Sachs prefers longer-dated AUD/NZD put options to express its expectation that the cross will eventually move lower.
The strategy is designed to manage the risk of sharp near-term volatility surrounding Australian inflation data and further energy-price shocks.
In practical terms, longer-dated puts allow investors to retain exposure to a future AUD/NZD decline without relying on the correction beginning immediately.
The bank’s central view is that higher energy prices can keep the cross supported in the short run, but a renewed RBNZ tightening cycle should become increasingly important over the medium term.
With AUD/NZD still trading above 1.20 and recording a sizeable year-to-date gain, Goldman sees scope for some of that strength to unwind as markets price a higher New Zealand interest-rate path.
The immediate direction will depend on Australian CPI and commodity markets, but the prospect of two additional RBNZ increases strengthens the case for the New Zealand Dollar to recover against its Australian counterpart over the months ahead.
The USD/CAD pair trades marginally lower to near 1.4113 during the European trading session on Tuesday. The Loonie pair edges down as the Canadian Dollar (CAD) outperforms its major currency peers. However, the strength is expected to be temporary, as oil prices have declined further due to continued negotiations between the United States (US) and Iran to adhere to the peace agreement after recent violations.
In European trade, the WTI Oil price posts a fresh weekly low, trading 2.2% lower to near $79.40. Currencies from economies, such as Canada, which are net energy exporters, tend to lose their appeal when oil prices start declining.
Meanwhile, the US Dollar trades flat after a strong Monday, awaiting the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. According to the CME FedWatch tool, traders see a 62% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75%.
On Monday, US President Donald Trump urged Fed Chairman Kevin Warsh to cut interest rates in the Wednesday meeting. To support his view, Trump said that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.
USD/CAD technical analysis
USD/CAD trades slightly lower at around 1.4113. The pair wobbles near the 20-day exponential moving average (EMA), which is at 1.4103, suggesting a sideways trend.
The Relative Strength Index (RSI) at 53.7 has drifted back toward neutral territory, hinting that upside momentum has cooled but not reversed, leaving scope for a gradual grind higher while the price stays supported by the short-term EMA.
On the downside, the area between 1.3962 and 1.4001 would be the key demand zone for the pair. Looking up, the pair needs a decisive break above the July 14 high at 1.4157 to revisit the yearly high at 1.4248.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Fed Interest Rate Decision The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index continues to trade within a well-defined uptrend, holding above both the rising trendline and the 50-EMA ($100.52). Price is currently trading around $101.52, while remaining comfortably above the 100-EMA ($99.91). RSI has climbed to around 63, indicating bullish momentum without yet reaching overbought territory.
Immediate resistance is located at $101.65, followed by $102.06 and $102.42. Initial support stands at $101.06, with stronger support at $100.50 and $99.92.
The broader outlook remains bullish while DXY holds above $101.06. A sustained breakout above $101.65 would expose $102.06, while a break below $100.50 would weaken the uptrend and shift focus toward $99.92.
GBP/USD Technical Analysis: Sterling Tries to Stabilise Above $1.3260 Support
Pound-Canadian Dollar could extend gains if oil prices retreat further, although the Bank of England remains the key driver. The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher on Monday as hopes of a pause in the US-Iran conflict triggered a sharp fall in oil prices and weakened the commodity-linked Canadian Dollar. However, Sterling’s gains remained limited as lower energy costs reduced expectations of a more hawkish Bank of England decision later this week.
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher on Monday, although gains were limited as falling oil prices weighed on the Canadian Dollar while softer Bank of England rate expectations capped Sterling.
At the time of writing, GBP/CAD was trading around CA$1.8797, up approximately 0.1% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.878553 (+0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.604752 (+0.12%)
Dollar to Canadian Dollar (USD/CAD): 1.41063 (+0.08%)
DAILY RECAP:
The Canadian Dollar (CAD) came under pressure at the start of the week as renewed hopes for a ceasefire in the Middle East triggered a sharp decline in oil prices.
Washington paused its attacks on Iran for a third consecutive night, while Tehran also halted retaliatory action, raising hopes that diplomatic efforts could gain momentum.
The easing in geopolitical tensions prompted a 6% fall in crude prices as markets reopened after the weekend, weighing on the commodity-linked Canadian Dollar.
Meanwhile, the Pound (GBP) struggled to capitalise on the Canadian Dollar's weakness as falling oil prices prompted markets to scale back expectations for a more hawkish Bank of England (BoE).
Although policymakers are still widely expected to leave interest rates unchanged later this week, some investors had anticipated that the recent surge in energy prices would encourage a firmer policy tone.
With oil prices retreating alongside hopes for a ceasefire, markets increasingly expect the Bank of England to maintain a cautious approach, limiting Sterling's appeal.
Near-Term GBP/CAD Forecast: UK Politics and Oil Prices to Drive the Pairing Looking ahead, a quiet UK economic calendar may leave domestic political developments as the main driver of the Pound.
As Prime Minister Andy Burnham enters his second week in office, investors will continue to scrutinise any new policy announcements, particularly spending commitments, tax cuts and how they are expected to be funded.
Fresh concerns over the UK's fiscal outlook could place renewed pressure on Sterling.
Meanwhile, with little Canadian economic data scheduled, the ‘Loonie’ is likely to remain driven by oil price movements. If the pause in Middle East hostilities continues and crude prices extend their recent decline, the Canadian Dollar could remain under pressure.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
ING’s Warren Patterson and Ewa Manthey report that Gold has moved higher on Monday as falling Oil prices ease inflation concerns and weigh on the US Dollar (USD) and Treasury yields. They say Gold should stay supported near current levels if yields remain contained, but warn that any hawkish surprise from the Federal Reserve (Fed) could cap further upside in the near term.
Lower yields and a softer dollar underpin bullion"Gold prices moved higher on Monday as a sharp decline in oil prices eased inflation concerns and the prospect of further monetary tightening. The move followed a pause in hostilities between the US and Iran."
"Lower oil prices also weighed on the US dollar and Treasury yields, improving the outlook for non-yielding assets ahead of this week's Federal Reserve meeting."
"Markets are now looking to the Fed and upcoming US inflation data for further guidance on the interest-rate outlook."
"Gold should remain supported near current levels if yields stay contained."
"However, any hawkish surprises from the Fed could limit further upside in the near term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) trades with caution at around 1.3300 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair is marginally higher, but is broadly under pressure, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
Investors expect the Fed to leave interest rates unchanged in the range of 3.50%-3.75% and warn of upside inflation risks. However, United States (US) President Donald Trump said on Monday that Fed Chairman Kevin Warsh should lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.
On the contrary, the CME FedWatch tool reflects traders seeing the monetary policy adjustment on the hawkish side. There is an 80.8% chance that the Fed will deliver an interest rate hike in September, the tool shows.
This week, investors also await the Bank of England’s (BoE) monetary policy announcement on Thursday, in which it is expected to keep interest rates steady at 3.75%, with a 7-2 majority.
GBP/USD technical analysis
GBP/USD trades marginally higher at around 1.3300, but is holding a bearish near-term bias as it remains capped beneath the 20-period Exponential Moving Average (EMA) at 1.3358 and below the broader descending resistance trend line that projects from the 1.3862 area.
The Relative Strength Index (14) near 43 stays below the midline, hinting that downside pressure persists rather than signaling an oversold condition, while the pair consolidates closer to underlying trend-line support than to the overhead resistance cluster.
On the topside, initial resistance is located at the 20-day EMA around 1.3360, with further supply expected near the prior resistance trend-line break zone at 1.3487. On the downside, the market finds structural support around the horizontal support of the Descending Triangle formation, where a sustained break would likely open the door to the psychological level of 1.3000.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator BoE Interest Rate Decision The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Pound-Dollar could recover if the Bank of England strikes a hawkish tone, although Fed guidance remains a key risk. The Pound to US Dollar (GBP/USD) exchange rate gave back early gains on Monday as renewed hopes for a Middle East ceasefire reduced demand for the safe-haven US Dollar, although Sterling also struggled to find support ahead of this week's Bank of England decision.
At the time of writing, GBP/USD was trading around $1.3311, down approximately 0.1% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.331485 (-0.08%)
Euro to Dollar (EUR/USD): 1.137464 (+0.03%)
Dollar to Yen (USD/JPY): 163.7248 (-0.08%)
DAILY RECAP:
The US Dollar (USD) initially weakened on Monday as the US and Iran paused attacks for a third consecutive night, raising hopes that a fresh ceasefire agreement and renewed diplomatic efforts could emerge.
Washington is reported to have halted strikes following warnings from senior military officials that US munitions stockpiles are becoming depleted, while Iran also paused its retaliatory attacks.
The easing in hostilities encouraged a more positive market mood, reducing demand for the safe-haven US Dollar.
However, USD later recovered some ground after reports that Yemen's Iran-backed Houthi militia had launched drone attacks on Saudi oil transport infrastructure, keeping tensions in the Middle East elevated.
Meanwhile, the Pound (GBP) remained subdued as investors looked ahead to Thursday's Bank of England (BoE) interest rate decision.
Following the pause in fighting, oil prices eased, reducing expectations that the BoE would adopt a more hawkish tone when policymakers conclude their latest meeting.
With energy prices retreating amid fresh hopes for peace, markets increasingly expect the Bank of England to maintain its cautious wait-and-see approach rather than react aggressively to recent geopolitical developments.
Near-Term GBP/USD Forecast: US Consumer Confidence to Support the ‘Greenback’? Looking ahead, Tuesday brings the latest US consumer confidence survey.
A forecast improvement in household sentiment could provide the US Dollar with modest support.
However, broader market risk appetite is likely to remain the dominant driver. If the US and Iran continue to refrain from further military action, improving confidence could reduce demand for the safe-haven US Dollar.
For the Pound, a quiet UK economic calendar may leave domestic politics in focus, with lingering concerns over how the government's recent policy commitments will be funded continuing to weigh on Sterling.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
