Gold Price Nears $3,390 as Trump Decision Looms and RSI Flags Overbought Risk
Gold (XAU/USD) is stuck at $3,375 on Wednesday as investors wait for President Donald Trump’s decisions.
Quick overview
- Gold (XAU/USD) is currently at $3,375 as investors await President Trump's announcements regarding the Federal Reserve.
- Physical gold demand is declining, with Perth Mint sales dropping 33% in July, indicating retail investor hesitance.
- Technically, gold is facing resistance at $3,390, and a break above this level could signal a shift in market sentiment.
- A bearish trade setup is suggested with an entry at $3,375 and targets set at $3,349 and $3,336.
Gold (XAU/USD) is stuck at $3,375 on Wednesday as investors wait for President Donald Trump’s decisions. A slightly stronger dollar and lower bond yields are also capping gains from economic uncertainty.
The market is watching as Trump is set to announce a short-term replacement for Federal Reserve Governor Adriana Kugler who resigned on Friday and a new Fed chair which could impact rate expectations going into fall. After last week’s soft US jobs number, market pricing (via CME FedWatch) is now 87% for a September rate cut.
Trump fired the commissioner of the Bureau of Labor Statistics after the jobs number and is intensifying pressure on institutions perceived as downplaying economic softness. He also threatened new tariffs on India over its Russian oil purchases and rattled global trade sentiment again.
Demand Cools, Perth Mint Sales Slide in July
Physical gold demand is cooling. Perth Mint gold sales in July fell 33% from the previous month. Silver sales were the lowest in six months as retail interest cools off with prices and macro uncertainty.
While institutional flows are driving the broader gold narrative, the drop in mint level demand could mean retail investors are hesitant to buy at these levels. This adds to the technical resistance zones in play.
Technical Outlook: Resistance Holds at $3,390
From a technical perspective, gold’s bounce from the July 31 low of $3,284 has been good. Price has made higher lows and reclaimed the 50 period EMA at $3,335 but is showing fatigue.
Gold is at $3,375, touching the descending trendline from the July 19 high. It’s tried twice to break $3,390 which is the 0% Fibonacci retracement. Candlesticks are spinning tops and smaller bodied, showing market indecision.
RSI is at 63.9, near overbought and unless momentum returns, upside is limited.Support is at $3,365 (0.236 Fib) and if that breaks, look for a drop to $3,336 and $3,323 both near the 50-EMA and deeper retracement levels. A break above $3,390 would likely invalidate near term bearish setups and could target $3,416 or $3,438.
Trade Setup: Bearish Rejection Play
- Entry: $3,375 (trendline resistance)
- Stop-Loss: $3,392 (above recent highs)
- Target 1: $3,349
- Target 2: $3,336
Look for a strong bearish candle rejection at $3,390 before entering short. Without volume and conviction, the rally looks weak. Close above $3,390 cancels the trade.
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