Gold Holds above $3,350 as Fed Cut Bets Build

Gold is holding its ground above $3,350 as traders weigh the growing odds of a September Federal Reserve rate cut against signs that inflation might still have some fight left in it.

Spot prices hovered near $3,367 on Monday, easing after Friday’s test of $3,401, as markets brace for this week’s double-hit of CPI and PPI data numbers that could decide gold’s next big swing.

1. Fed Rate-Cut Bets Still in Play

Friday’s sideways action comes after last week’s weaker-than-expected U.S. Nonfarm Payrolls and softer ISM Services data, a combo that’s pushed traders toward expecting a 25 bps Fed cut in September. The CME FedWatch Tool now puts the odds at 88.4%, which keeps gold attractive as lower rates make the non-yielding metal more competitive.

2. Inflation Isn’t Done Yet

Even with the dovish shift, inflation remains sticky in spots. The Prices Paid component of the ISM Services PMI jumped to its highest since November 2022, hinting that cost pressures may not be easing as fast as the Fed would like. This is why next week’s CPI (Wednesday) and PPI (Thursday) are critical, a hotter read could force the Fed to slow down its rate-cut plans.

3. Technical Picture Favors Consolidation Before the Next Break

Spot gold has been locked between $3,380 and $3,400 over the last two sessions. Clearing $3,400 could open a run toward $3,452 (June’s high) and then the big $3,500 psychological barrier. On the downside, a break below $3,355–$3,348, where the 20-day and 50-day SMAs meet could bring $3,300 and the 100-day SMA near $3,279 into view.

4. Tariff Tensions Add a Layer of Support

This week’s headlines about new U.S. tariffs, including on gold bar imports, may not have spiked spot prices, but they’ve added another layer of uncertainty to global trade flows. That’s quietly supportive for gold as a safe-haven, even if futures markets saw the bigger reaction.

5. Market Mood: Wait-and-See Into CPI

With traders now caught between Fed cut optimism and inflation anxiety, spot gold is likely to stay rangebound into next week’s inflation prints. The first decisive push, whether up or down, will probably come after the CPI release.

Gold’s holding pattern above $3,350 isn’t weakness, it’s the market catching its breath. The metal has a solid base, but the next move will depend on whether inflation plays nice or forces the Fed to stay cautious.

If you’re long, the chart still favors buying dips toward the $3,350 area with eyes on $3,400+. If you’re flat, next week’s CPI could be the green light or the red flag.