Gold prices remain locked in consolidation but continue to find strong support, even as geopolitical uncertainty begins to ease. Spot gold last traded at $3,371.90 an ounce, hovering near its Friday peak of $3,378.91, with investors waiting for fresh catalysts to drive the next breakout.
Consolidation Amid Shifting Flows
Analysts at Société Générale note that while the metal is struggling to push decisively above $3,400, downside risks appear limited. Exchange-traded fund (ETF) flows remain steady, while some unwinding of managed money positions has actually left gold on firmer footing.
Earlier in the year, gold rallied on a rare alignment of strong ETF inflows, robust central bank purchases, and managed money building long positions. Although ETF holdings slipped by 5 tonnes last week to 2,872 tonnes, they remain near record highs.
Société Générale maintains a bullish outlook, reiterating that it will not recommend selling until gold moves above $4,000 per ounce – a level it expects could be reached in the second quarter of 2025.
Fed Policy Adds Tailwinds
The US Federal Reserve added further support last week. Chair Jerome Powell surprised markets at Jackson Hole with a dovish tone, strongly hinting at interest rate cuts ahead. Traders are now pricing in an 85% chance of a 25-basis-point cut in September, with a growing probability of another cut in December.
Lower rates weaken the US dollar and Treasury yields, making gold more attractive as a non-yielding asset. The greenback did stage a modest corrective bounce at the start of the week, but analysts say it lacks momentum for a sustained advance.
Technical Outlook: Bulls Still in Control
From a technical perspective, gold maintains a neutral-to-bullish stance:
On the daily chart, gold trades above all key moving averages.
The 20-day SMA sits around $3,348, lacking directional momentum, while the 100-day SMA at $3,319 is beginning to flatten.
Technical indicators remain around their midlines, reflecting ongoing consolidation.
On the 4-hour chart, the short-term picture is more positive. The 20 SMA has turned higher and is on the verge of crossing above the 200 SMA near $3,350, a bullish signal.
Support levels: $3,350 · $3,337 · $3,319
Resistance levels: $3,379 · $3,391 · $3,406
Outlook: Rangebound, But Well Supported
While geopolitical risks from the Russia–Ukraine conflict have eased slightly, uncertainty remains well above historical averages. The freezing of Russian central bank assets has also created a precedent that should sustain long-term central bank demand for gold.
Investors will be watching this week’s US July PCE Price Index – the Fed’s preferred inflation gauge – for further clues. With inflation expected to remain below 3% year-on-year, the case for policy easing remains intact.
In the meantime, gold bulls continue to defend key support levels, keeping the metal well-positioned to challenge the $3,400 resistance zone in the short term.
