Gold Price Eyes $3,390 After Trump Fed Shake-Up Rumors Hit Dollar Hard

Quick overview

Gold (XAU/USD) edged higher Thursday as market uncertainty flared following reports that Donald Trump may replace Federal Reserve Chair Jerome Powell by September or October. The news hit the dollar, which fell to its lowest level since March 2022, giving gold bulls fresh momentum.

Gold rose modestly to $3,335, continuing its rebound from earlier lows near $3,293. With the greenback under pressure, dollar-denominated gold becomes more attractive for foreign investors. The trigger? Trump’s latest remarks, calling Powell “terrible” and signaling he’s eyeing “three or four” candidates to lead the Fed next term.

Markets quickly recalibrated for a potentially more dovish Fed, one that might aggressively slash rates if Trump returns to office. “Trump clearly wants a dovish Fed Chair next time around,” said Tim Waterer, Chief Market Analyst at KCM Trade. “That’s pinning down the USD and lifting gold.”

While Powell told lawmakers that Trump’s tariffs might cause a short-term price jump, he warned persistent inflation risks remain, reinforcing the Fed’s wait-and-see stance.

XAU/USD Technical Setup at Crucial Juncture

From a charting perspective, gold is testing a key resistance zone at $3,343 — where the 50-period EMA intersects a descending trendline stretching back to mid-June. Price bounced earlier this week from the $3,293 support and is now forming a higher low around $3,314.

• Resistance Zone: $3,343–$3,344
• Support Levels: $3,314 and $3,293
• MACD: Bullish crossover forming, green histogram building
• Chart Pattern: Descending channel with breakout potential

A confirmed breakout above $3,344 on strong volume could send gold toward $3,390 and $3,415 in short order. Failure to breach the resistance, however, may see another pullback toward $3,314.

What to Watch: Fed Data and Global Stability

Aside from Fed politics, markets are awaiting U.S. GDP data and Friday’s Personal Consumption Expenditures (PCE) index — a key inflation gauge. Both will influence expectations for rate cuts, potentially moving gold sharply.

Also in play is geopolitical risk. The Israel-Iran ceasefire appears to be holding, and Trump’s scheduled talks with Iranian officials next week may bring further clarity on nuclear tensions — another catalyst for safe-haven flows.

Trade Setup for XAU/USD:

• Entry (Breakout): Long above $3,344 on 2-hour close with volume
• Targets: $3,390 and $3,415
• Stop-Loss: Below $3,314
• Alternate Setup: Bullish engulfing at $3,314 offers second-chance long

For now, traders should stay alert. Gold’s technicals are aligning with macro volatility — a breakout could signal the start of a bigger move.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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