Quick overview

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Gold (XAU/USD) attracted some short sellers to the area of $3.4K.  The yellow metal continues to decline amid a slight rebound in the US dollar. Traders await the release of the US inflation report later on Tuesday.

The USD-denominated commodity price is undercut by a stronger greenback and a more general risk-on attitude, which limits the price below the crucial psychological barrier at $3,400. However, the non-yielding yellow metal may receive some support from growing wagers for a September rate cut by the US Federal Reserve (Fed).

Fed Governor Michelle Bowman stated on Saturday that her forecast of three interest rate cuts being likely appropriate in 2025 is strengthened by the recent weak job data, which highlights her concerns about the fragility of the labor market.

Traders are now pricing in an almost 89 percent chance of a Fed rate cut in September, with at least two rate cuts anticipated by the end of the year.
The month before early August 2025 saw a 3.8 percent increase in gold futures prices, with a roughly 43 percent year-over-year increase.

Gold prices have been supported by the market’s increased risk aversion in response to the tariffs and trade tensions. Gold has an internationally standardized storage capacity and is a long-term store of value. The value of one troy ounce of gold is the same. Yellow metal is a valuable asset that possesses inherent worth and can maintain its purchasing power over centuries, both globally and locally.