Gold slipped back on Wednesday during early European trading, pulling away from a two-week high near $3,395. Sellers moved in to take profits, while a modest rebound in the U.S. dollar added weight to the move.
Even so, the downside looks cushioned as political pressure on the Federal Reserve keeps investors wary and safe-haven demand alive.
Here’s What’s Moving Gold Right Now
1. Profit-Taking After the Rally
Gold’s recent climb above $3,390 attracted profit-taking, and the pullback shouldn’t come as a surprise. After a strong run in August, some traders are cashing in while waiting for fresh catalysts.
2. Dollar Strength Returns
The U.S. dollar found support after slipping earlier this week. The rebound is modest, but enough to pressure non-yielding assets like gold. With traders cautious ahead of key U.S. data, the dollar index has steadied near recent highs.
3. Fed Independence Under Fire
Markets are closely following the political standoff between President Trump and Fed Governor Lisa Cook. Trump’s push to remove Cook has sparked a legal fight and raised doubts over the Fed’s independence. Safe-haven flows often find their way into gold when the credibility of central banks is questioned, making this story one to watch.
4. Rate Cut Bets Still Rising
Despite the noise, rate expectations lean dovish. Powell signaled earlier that risks to jobs are increasing, and markets now price in an 87.3% chance of a September rate cut, up from 75% last week. Lower rates typically weaken the dollar and boost gold, keeping bulls interested in buying dips.
5. Technical Picture
Gold remains locked in a $3,300–$3,400 range, with buyers defending the mid-$3,300s and sellers repeatedly capping rallies near $3,400–$3,426. The chart shows price still trading above key trend markers, the rising moving average and ascending trendline, keeping the broader outlook constructive. As long as gold holds above the $3,330–$3,346 support zone, momentum leans in favor of the bulls.
On the upside, clearing the $3,400–$3,426 ceiling would expose $3,439 and reopen the path toward the major $3,500 all-time high zone. On the flip side, a sustained drop below $3,330–$3,327 would test $3,300 support, and losing that floor could shift the focus down to $3,167. Until then, the path of least resistance stays tilted upward.
Here’s the Takeaway
Gold’s dip looks more like healthy profit-taking than a trend reversal. The dollar is steady, but Fed independence concerns and firm rate-cut bets mean gold still has strong support.
It’s worth to watch $3,325 as a near-term floor and $3,400 as the ceiling. Powell’s next signals, along with Friday’s PCE data, could be the catalyst that sets the next big move.