Gold Hits Two-Week High, Targets $4,150 as Fed Rate Hike Expectations Fade
Gold prices (XAU/USD) extended their bullish momentum for a second consecutive session, climbing to their highest level in nearly two weeks around $4,141 during Wednesday's Asian trading session. The precious metal continued to benefit from a weaker U.S. dollar and easing expectations of further Federal Reserve policy tightening amid improving geopolitical sentiment.
Gold Breaks Key Resistance as Bullish Technical Signals Strengthen
From a technical standpoint, gold's daily breakout above the 200-period Exponential Moving Average (EMA) on the four-hour chart reinforces the bullish outlook. The Relative Strength Index (RSI) remains near 65, indicating strong upward momentum without yet reaching extreme overbought territory, while the Moving Average Convergence Divergence (MACD) histogram remains in positive territory, signaling that buyers continue to dominate the short-term trend.
Despite the bullish momentum, the rally may encounter immediate resistance around the $4,130–$4,150 region, where increasingly overbought conditions could slow additional gains if buying interest begins to fade.
On the downside, initial support is located at the 200-period EMA near $4,115. A decisive break below this level could trigger a deeper correction toward the daily low around $4,065, followed by the $4,043–$4,042 support zone, $4,020, and eventually the key $4,000 psychological level.
Hormuz Deal Optimism Reduces Inflation Fears and Pressures the U.S. Dollar
Investor sentiment has improved as markets continue to anticipate a diplomatic breakthrough that could end the five-month conflict between the United States and Iran.
U.S. Treasury Secretary Scott Bessent stated that Washington could reach an agreement with Iran as early as Wednesday to reopen the Strait of Hormuz, helping restore normal shipping operations through one of the world's most strategically important energy corridors.
Separately, Axios, citing sources familiar with the negotiations, reported that the United States, Iran, and Oman are close to finalizing a temporary agreement to reopen the waterway.
Meanwhile, OPEC+ announced on Sunday that it would increase oil production starting in September, easing concerns over global supply disruptions and pushing crude oil prices to their lowest level since June 13.
Lower oil prices have reduced inflation expectations, encouraging investors to scale back bets on additional Federal Reserve tightening. The softer inflation outlook has weighed on the U.S. dollar while increasing demand for non-yielding assets such as gold.
Fed Officials Remain Hawkish Ahead of Key U.S. Employment Data
Despite the recent decline in Fed rate hike expectations, traders continue to price in the possibility of one additional interest rate increase before the end of the year, supported by signs that the U.S. labor market remains resilient.
The latest Job Openings and Labor Turnover Survey (JOLTS) released Tuesday by the U.S. Bureau of Labor Statistics showed job openings slipped slightly to 7.36 million, but remained above levels seen a year earlier, suggesting labor demand continues to hold up.
Federal Reserve officials also maintained a cautious tone. Kansas City Fed President Jeff Schmid and Philadelphia Fed President Anna Paulson both reiterated support for maintaining restrictive monetary policy and keeping interest rates elevated until inflation returns sustainably toward the central bank's target.
Their comments may prevent aggressive bearish positioning against the U.S. dollar ahead of Friday's highly anticipated Nonfarm Payrolls (NFP) report.
ADP Employment and ISM Services PMI in Focus
Looking ahead, investors will closely monitor Wednesday's U.S. economic calendar, including the ADP Employment Report and the ISM Services PMI, for fresh clues on the health of the U.S. economy and the Federal Reserve's policy path.
At the same time, developments surrounding the Middle East crisis are expected to remain a key catalyst for both the U.S. dollar and gold prices.
Overall, the combination of improving technical indicators, easing inflation concerns, and fading expectations of aggressive Fed tightening continues to support the bullish outlook for XAU/USD, leaving the precious metal well-positioned to challenge the $4,150 resistance area in the near term.
SEO Title: Gold Reaches Two-Week High as Fading Fed Rate Hike Bets Boost XAU/USD Toward $4,150
Meta Description: Gold climbs to a two-week high near $4,141 as easing Fed rate hike expectations, weaker U.S. dollar, Hormuz deal optimism, and bullish technical signals drive XAU/USD toward the $4,150 resistance.