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Commerzbank’s Carsten Fritsch and Thu Lan Nguyen note that the Gold price has dropped nearly 30% from its January record as higher real yields and hawkish Federal Reserve expectations weigh on the metal. The bank cuts its year-end Gold forecast to USD 4,500 per troy ounce, but still projects a move to USD 5,000 by end-2027 if Fed rates stay unchanged and later fall.

Forecast cut but recovery seen later

"We are lowering our year-end gold price forecast to USD 4,500 per troy ounce (previously: USD 4,800). This reflects the significant fall in prices, which can be attributed to the Fed adopting a more hawkish stance than expected."

"Nevertheless, there is potential for the gold price to recover from its current level, as we consider current market expectations of Fed rate hikes to be excessive and anticipate that Fed interest rates will remain unchanged until the end of the year."

"In this scenario, the Fed would likely refrain from raising interest rates and might even cut its key interest rate from mid-2027 onwards, as the 2% target would then be reached in spring 2027. This provides scope for a further price increase next year to USD 5,000 per troy ounce by the end of 2027 (previous forecast: USD 5,200)."

"However, without a reversal in interest rate expectations, a lasting return of ETF investors and a recovery in the gold price are unlikely."

"As long as this remains the case, gold is unlikely to benefit disproportionately from increased demand for safe havens."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING’s Warren Patterson and Ewa Manthey note that Brent has sold off sharply as US–Iran strikes pause and President Trump signals a “good chance” of a deal. They stress that flows through the Strait of Hormuz and Bab el-Mandeb, as well as Black Sea exports, remain critical. Persistent geopolitical risks mean Oil is likely to retain a significant risk premium.

Geopolitics cap downside despite sharp selloff

"The oil market continues to sell off heavily, with the US and Iran continuing to hold off on further strikes, while President Trump said that talks are happening and that there is a “good chance” of a deal, although he warned that strikes would resume in the event a deal fails to materialise."

"However, we have been in this position multiple times before, and so the market may be getting a bit ahead of itself."

"If this move lower is to be sustained, we will need to see a recovery in flows through the strait."

"Furthermore, even in the event of a deal, one would expect that the market will need to continue to price in a large risk premium, given that recent events have demonstrated how quickly a deal can unravel."

"A resumption in oil flows from the Black Sea would also add some downward pressure on the market, with oil loadings at both the CPC terminal and the Sheskharis terminal in Russia resuming."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• AUD/USD falls around 0.3% and trades near the 0.6970 area following Bullock’s hawkish but growth-sensitive remarks.
• US Consumer Confidence declined to 90.8 in July from 92.2, limiting the Greenback’s advance.
• Australian CPI is expected to rise 0.2% MoM and remain at 4.0% YoY, keeping further RBA tightening in focus.

AUD/USD trades lower near the 0.6970 area on Tuesday, falling around 0.3% as the Australian Dollar (AUD) comes under pressure despite hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock.

Bullock warned that underlying inflation remains too high and said that “some further easing in the growth of demand is likely to be required” to return inflation sustainably to the RBA’s 2%–3% target. She added that the Board remains prepared to act, “including by increasing the cash rate further if needed.” Although higher rates would normally support the Aussie, concerns that additional tightening could weaken domestic activity and the labor market weighed on the currency.

In the United States (US), the Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June, instead of the modest improvement anticipated by markets. The Present Situation Index also fell for a third consecutive month to 114.9, while the Expectations Index remained unchanged at 74.7.

Attention now turns to Australia’s June Consumer Price Index on Wednesday. Headline CPI is expected to rise 0.2% MoM after falling 0.7% previously, while annual inflation is forecast to remain elevated at 4.0%. Trimmed Mean CPI is projected to increase 0.4% MoM, matching the previous reading, with the annual underlying measure previously standing at 3.6%.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6969, maintaining a bearish near-term bias as the pair holds beneath both the 100-period Simple Moving Average (SMA) at 0.6971 and the 20-period SMA at 0.6983. The cluster of nearby overhead barriers suggests rallies are likely to be sold into for now, while the Relative Strength Index (RSI) around 41 points to soft momentum rather than outright oversold conditions, hinting that sellers still retain control but lack strong follow-through.

On the topside, initial resistance is aligned at the 100-period SMA around 0.6971, followed by horizontal caps at 0.6975 and the 0.6981 region, where the day’s open also sits, before the 20-period SMA at 0.6983 and the higher barrier at 0.6987 come into play. On the downside, immediate support emerges at the horizontal level of 0.6964; a sustained break below this floor would expose lower levels, while holding above it could encourage another test of the dense resistance band overhead.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• GBP/USD trades near 1.3300 inside a range of barely 30 pips, the narrowest session in weeks and the quietest possible answer to a week carrying two rate decisions.
• Firmer British data has bought the currency nothing, with price still pinned beneath the converged moving average band just under 1.3400.
• The Federal Reserve reports Wednesday evening and the Bank of England follows on Thursday with a full Monetary Policy Report attached.

The Pound trades near 1.3300 in the New York morning, effectively flat on a session that has run barely 30 pips between a floor a shade above 1.3250 and a ceiling fractionally above the 1.3300 handle. That is the narrowest daily range in weeks, and it arrives a little over a day before a Federal Reserve decision and two days before a Bank of England decision carrying a fresh Monetary Policy Report.

Quiet is a position, not the absence of one

A 30-pip range on the eve of a central bank decision reads as waiting, and the more useful interpretation is that the market has already taken its side and does not need to add to it. Price sits below both the 50-day and the 200-day Exponential Moving Averages (EMA), which have converged just under 1.3400 and now cap every attempt from beneath.

Sterling has given back roughly two and a half cents since the mid-July peak near 1.3550 without a single obvious catalyst, and the retreat has been orderly rather than violent. Orderly declines beneath declining averages are how positioning gets built, not how it gets unwound. The compression is happening directly under a shelf at 1.3300 that the currency spent three weeks defending and has now lost.

The Dollar is running this exchange rate

Nothing in the day's price action originated in London, which is the first thing to notice about a currency that spent the session waiting. The Dollar Index sits near 101.50 at a one-month high, the Dollar trades just short of 164.00 against the Yen, and the American currency absorbed the safety bid out of an equity rout that took Korean shares down almost 11% and the Nikkei 225 down close to 4%.

Rate futures put the odds of a hike at Wednesday's meeting near 36%, a level that has not moved since the middle of last week despite the stand-down in the Gulf and a 7% break in Crude Oil. At least one increase is roughly 80% priced by September. A Federal Reserve that might tighten and will not ease is the single heaviest weight on this exchange rate.

Tuesday's American data was soft and the Dollar did not care, which is the tell that matters into Wednesday. The four-week average of private hiring slowed again to 15K from 16.25K, and July consumer confidence moderated to 90.8 against expectations nearer 92, with the present situation index weaker for a third consecutive month and the expectations component still beneath the 80 line historically associated with recession risk. Weak data buys rate cuts only when cuts are on the table, and they are not.

The British side has been switched off

The domestic evidence has actually improved, which makes the inability to hold 1.3300 the more interesting half of the picture. Retail sales rose 1% in June against expectations for a decline, business activity surveys returned to growth and household confidence reached a six-month high. June inflation at 2.6% YoY with services at 3.6% gave the committee cover to sit still, and sitting still is what the calendar consensus expects on Thursday.

That consensus is a seven to two vote for a hold with two members again preferring 4.00%, the same split as June, against a market that has begun pricing two increases by March. None of it has been worth a cent to the currency. A Pound that cannot rally on a hawkish central bank and improving data is telling you what it thinks of the October Budget.

Two central banks holding at the same rate with hawkish dissent on both sides should be neutral for the exchange rate, and it plainly is not. Only one of the two prints the currency the world buys when Asian equities fall 11% in a session, and only one of the two is attached to an economy the market believes can carry another increase. Symmetry in policy is not symmetry in demand.

The 48-hour docket

Wednesday's Federal Reserve decision lands at 18:00 GMT with no fresh projections attached, so the statement language and the press conference at 18:30 GMT carry the entire signal. Thursday's Bank of England announcement follows at 11:00 GMT with minutes, a full Monetary Policy Report and a press briefing half an hour later.

The American docket does not wait for either decision, and Thursday is where the risk stacks. June core Personal Consumption Expenditures prices arrive at 12:30 GMT with consensus at 0.2% MoM and 3.3% YoY, alongside the first estimate of second-quarter Gross Domestic Product at 2.1% annualized and jobless claims at 200K against 187K. Friday adds the second-quarter employment cost index at 0.8% and the final July sentiment survey.

Technical levels

Resistance: 1.3300 is the first line and the session has already failed there, with the converged 50-day and 200-day averages just under 1.3400 marking a band price has not reclaimed in a week.

Support: The 1.3250 area held the session floor, with 1.3200 beneath it and the late-June base just under 1.3150 marking the bottom of the summer range.

Bias: Bearish. Strength into 1.3300 is for selling while the averages decline overhead, with 1.3250 and then 1.3200 as objectives. A daily close above 1.3400 invalidates and reopens 1.3550.

GBP/USD daily chart

Scotiabank strategists Shaun Osborne and Eric Theoret report GBP/USD is extending its bearish reversal toward early-July levels as markets scale back Bank of England (BoE) tightening expectations. September pricing has been cut and cumulative hikes by December reduced. Technicals are bearish, with Relative Strength Index (RSI) slipping and a range between the mid-1.31s and mid-1.35s, plus nearby support at 1.3250 and resistance at 1.3350.

Pound weighed by softer BoE pricing

"The data calendar is limited ahead of Thursday’s BoE, where the central bank will also publish its latest forecast update."

"As with EUR, the GBP is also seeing a loss of fundamental support via spreads, with short-term rate markets fading their pricing of BoE tightening."

"Pricing for the September meeting has fallen from 20bpts to 13bpts and cumulative tightening by December has fallen by about 12bpts to 37bpts."

"The GBP is soft, down a fractional 0.1% vs. the USD and extending its bearish reversal from its mid-July low with a drift toward levels last seen in early July."

"Bearish—the RSI is drifting further into bearish territory and threatening a push below 40. The local range is bound between the late June low in the mid-1.31s and the mid-July high in the mid-1.35s. We note the potential for near-term support at 1.3250 and see near-term resistance at 1.3350."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• XAU/USD trades near $4,020 after shedding roughly 1.4%, printing the day's low in the minutes after a soft July confidence survey.
• Korean equities fell almost 11% and the semiconductor complex was sold worldwide, but none of that fear reached the metal.
• The Federal Reserve decision lands Wednesday with no cut priced anywhere on the 2026 curve.

Gold trades near $4,020 in the Tuesday New York morning, down roughly 1.4% on a session that started near $4,075 and never built a bid. The slide ran straight through a global equity shock that should have been the strongest advertisement for the metal in months, and the day's low printed just above the $4,000 handle instead.

A fear trade that skipped the fear asset

The damage overnight was concentrated in Asia, where Korean shares fell almost 11% as the two largest memory makers there dropped by double digits, the Nikkei 225 gave up close to 4%, and the regional benchmark fell 3%. Renewed skepticism about the returns on artificial intelligence (AI) spending did the work. Money moved into government bonds and the US Dollar rather than into Bullion.

The US Dollar Index (DXY) sits near 101.50 at a one-month high, and the US Dollar trades just short of 164.00 against the Yen. Treasury yields eased on the equity move, which ordinarily supports an asset that pays no coupon. Gold fell anyway, which says the bid for protection is being expressed in currency and duration and not in metal.

The other bid the metal has lost is the war, and the pause in that war is now four days old. American strikes on Iran are on hold for a fourth day, with Washington claiming Tehran asked for the pause and Tehran denying any negotiation is under way beyond talks with Oman on safe passage. Shipping through the Strait of Hormuz still runs at fewer than ten vessels a day against roughly 100 before the conflict, so the chokepoint remains shut in practice while the price behaves as though it is open.

One variable, and it reports on Wednesday

The metal has spent July trading a single input, and that input reports at 18:00 GMT on Wednesday. The hike tail for this meeting has been pinned near 36% since the middle of last week, unmoved by the stand-down in the Gulf and by a 7% break in Crude Oil, with at least one increase roughly 80% priced in by September and no cut anywhere on the 2026 curve.

June's inflation print did the rest of the damage, and the arithmetic behind it is not subtle. Headline at 3.5% YoY against an upper bound of 3.75% flipped the real policy rate back to positive after two months underwater, and core at 2.6% widens that gap to more than a full point. A metal that pays nothing cannot argue with a policy rate that might rise and will not fall.

The owners changed, and the story did not

June fund flows explain the shape of this tape better than any headline does. Physically-backed, exchange-traded products shed roughly $8.9 billion over the month per World Gold Council data, cutting holdings by 74 tonnes to just above 4K tonnes, with the bulk of the exit in North America as investors chased yield elsewhere. The first half still ran positive at roughly $8 billion of net inflows, and Asian funds took a record $12 billion of that.

That regional split explains a tape that neither breaks down nor recovers. Western allocators sell the metal when real rates rise, and Asian buyers accumulate it for reasons that have nothing to do with the next Federal Reserve (Fed) decision on Wednesday. The result is a floor just under $3,950 that keeps holding while every rally since June dies beneath the moving averages, with a drawdown of roughly 28% from January's record near $5,600 producing no capitulation at all.

The data the metal has to survive

Wednesday's decision arrives without a fresh set of projections, so the statement language and the press conference at 18:30 GMT carry the entire signal. Thursday brings the June core Personal Consumption Expenditures price index at 12:30 GMT, with consensus at 0.2% MoM and 3.3% YoY against 0.3% and 3.4% previously, alongside the first estimate of second-quarter Gross Domestic Product at 2.1% annualized and Initial Jobless Claims at 200K against 187K.

The American evidence this week has been soft, and the metal has not been paid for it. The four-week average of private hiring slowed again to 15K from 16.25K, and July confidence moderated to 90.8 against expectations nearer 92, with the Present Situation Index weaker for a third consecutive month and the expectations component still beneath the 80 line historically associated with recession risk. Soft data buys Gold only when it buys rate cuts, and it no longer buys rate cuts.

Technical levels

Resistance: The session ceiling near $4,075 is the first line, with the $4,150 area that has capped every attempt this month above it, and the 50-day Exponential Moving Average (EMA) near $4,200 marking the structural cap after crossing beneath the 200-day near $4,300 earlier in July.

Support: The $4,000 handle is the only level that matters into the decision, and beneath it the late-June low just under $3,950 is the floor of the entire summer range.

Bias: Bearish. Rallies into $4,075 are for selling while both averages decline overhead, with the $4,000 handle and then $3,950 as objectives, and the daily Stochastic Relative Strength Index near 63 leaves room beneath. A daily close above $4,150 invalidates.

XAU/USD daily chart

• Gold falls as a firmer US Dollar outweighs support from declining Oil prices.
• Traders await the Fed interest rate decision on Wednesday, with markets pricing a 35% chance of a rate hike.
• XAU/USD approaches $4,000 support, with RSI on the daily chart holding below the neutral 50 level.

Gold (XAU/USD) trades on the back foot on Tuesday, pressured by a firmer US Dollar (USD), even as Oil prices extend their pullback on hopes of an end to the US-Iran war. At the time of writing, XAU/USD trades around $4,020, down 1.40% on the day, after failing to sustain gains above $4,100 on Monday.

US President Donald Trump said on Tuesday that it was a “good time for Iran to make a deal,” warning that the US would “go back and finish the job” if no agreement was reached. Iran denied holding direct talks with the United States.

Meanwhile, Oman presented Iran with a proposal for the joint management of the Strait of Hormuz through “voluntary fees,” under which Iran would not have sole control of the key shipping route.

Oil prices have erased all of last week’s gains after the United States and Iran paused their attacks. West Texas Intermediate (WTI) trades around $80.30, extending its decline for a third consecutive day. Despite the sharp pullback, Oil prices remain elevated and continue to fuel inflation concerns.

While the US-Iran war stays at the forefront, attention is also turning to the Federal Reserve’s (Fed) interest-rate decision on Wednesday, which carries an unusually high risk of a surprise rate hike.

The Fed is widely expected to keep the federal funds rate unchanged at 3.50%-3.75%. However, according to the CME FedWatch Tool, traders price in around a 35% chance of a 25-basis-point (bps) increase.

Hawkish bets have strengthened since Fed Chair Kevin Warsh led his first policy meeting in June. Warsh has repeatedly stressed the need to restore price stability as inflation runs above the 2% target.

Will $4,000 hold or break?

For Gold, the upcoming Fed decision could prove pivotal in determining whether the $4,000 support holds or gives way to a deeper corrective decline.

A surprise rate hike would put Gold at risk of falling below $4,000. Higher borrowing costs typically weigh on non-yielding assets while boosting the US Dollar and US Treasury yields.

The base case is a hawkish hold, with the Fed leaving rates unchanged while keeping the door open to an increase later this year as energy-driven inflation risks persist without a lasting resolution to the US-Iran war. Such an outcome could also leave Gold vulnerable to a break below $4,000.

Meanwhile, if the Fed adopts a less hawkish stance and views the energy shock as temporary, traders may scale back rate-hike bets. That could weaken the US Dollar and help Gold hold above the $4,000 support.

Technical analysis: Bears retain control below middle Bollinger Band

On the daily chart, XAU/USD maintains a mildly bearish near-term bias as it trades below the 20-day Simple Moving Average (SMA) at around $4,072, which also represents the middle Bollinger Band.

The band structure shows spot trading in the lower half of the envelope, while the Relative Strength Index (RSI) at 43 stays below the neutral 50 level, suggesting that recovery attempts lack strong momentum within a still‑pressured trend backdrop flagged by an Average Directional Index (ADX) near 32, which signals persistent but moderating trend strength.

On the topside, initial resistance emerges at the Bollinger middle band and 20‑day SMA near $4,072, followed by the upper band around $4,180, where sellers could reassert control if tested.

On the downside, immediate support is seen at the psychological $4,000 handle, ahead of the lower Bollinger band near $3,964. A daily close below this latter floor would expose deeper losses and reinforce the prevailing bearish bias.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

BNY’s Geoff Yu highlights that Reserve Bank of Australia (RBA) Governor Michele Bullock signaled a possible rate hike at the August 10–11 meeting, stressing inflation is still too high and productivity weak. She noted domestic demand and the labor market have softened, but the RBA stands ready to tighten further if needed, with AUD/USD slightly weaker and Australian bond yields lower.

Bullock flags August hike risk

"Reserve Bank of Australia Governor Michele Bullock signaled that an interest rate hike will be on the table at the RBA’s August 10–11 meeting."

"She said inflation remains too high, with the board focused on preventing elevated cost pressures from becoming entrenched."

"Bullock said domestic demand has eased and labor market conditions have softened, but weak productivity is limiting the economy’s ability to grow without reigniting inflation."

"She warned that without stronger productivity, Australians will struggle to see meaningful real wage growth."

"The bank is prepared to tighten further if needed to meet its mandate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• USD/CAD trades around 1.4105 on Tuesday, down 0.14% on the day ahead of the Fed's monetary policy decision.
• Lower Oil prices continue to limit the Canadian Dollar's recovery potential despite a softer US Dollar.
• Investors await the Fed's projections and comments, while Donald Trump once again calls for lower interest rates.

USD/CAD trades near 1.4105 on Tuesday at the time of writing, down 0.14% on the day, though the pair remains close to its recent highs as traders refrain from taking aggressive positions ahead of the Federal Reserve (Fed) monetary policy decision. The US Dollar (USD) lacks a clear direction as markets widely expect the central bank to leave interest rates unchanged, with attention now turning to updated economic projections and comments from Fed Chair Kevin Warsh.

The Canadian Dollar (CAD) is attempting a modest rebound, but its upside remains limited by the continued decline in Oil prices. West Texas Intermediate (WTI) Oil has fallen to a fresh weekly low as negotiations between the United States (US) and Iran continue in an effort to preserve the ceasefire despite recent violations. For an economy heavily reliant on energy exports such as Canada, a sustained decline in Oil prices tends to weaken the domestic currency.

On the political front, US President Donald Trump once again urged the Fed to lower interest rates, arguing that recent inflation data justify monetary easing. Trump also struck a more conciliatory tone toward Iran, saying he wants to avoid targeting critical infrastructure while warning that Tehran can no longer violate existing agreements, helping to ease fears of a broader escalation in the Middle East.

The latest US economic data paint a mixed picture. The four-week average of the ADP Employment Change fell to just 15K, highlighting a gradual slowdown in labor market momentum. Meanwhile, the Conference Board Consumer Confidence Index eased to 90.8 in July from 92.2 previously, pointing to a modest deterioration in household sentiment. These indicators support expectations that the Fed could adopt a less hawkish tone in the coming months, although policymakers are still widely expected to keep interest rates unchanged at this week's meeting.

CAD holds near fair value as rate gap with USD caps upside

Strategists at Scotiabank note that the Canadian Dollar is treading water against Greenback, with the bank observing that “the CAD is holding little changed against the generally stronger USD.” They judge the currency to be broadly fairly valued at current levels, pointing out that their “fundamental fair value estimate suggests spot is trading right about where it should be in broad terms, with the equilibrium estimate edging up to 1.4086 today.”

On the drivers, Scotiabank highlights that “softer crude oil is a mild headwind but the real constraint on the CAD still comes from wide short-term interest rate differentials relative to the USD.” The bank adds that “a Fed hold tomorrow may allow the CAD to improve a little but scope for improvement is limited absent a significant narrowing in rate differentials—which we do not expect to develop until later this year.”

ING’s Padhraic Garvey expects the Federal Reserve (Fed) to leave rates unchanged at the upcoming Federal Open Market Committee (FOMC) meeting, with odds seen around 60:40 for no move. He argues that calmer June inflation, reduced geopolitical tensions with Iran and vulnerabilities in the US economy outside tech support a hold. However, he notes a non-negligible risk of a surprise 25bp hike.

Fed decision finely balanced at 60:40

"The upcoming FOMC meeting will be the first in quite some time that a large portion of observers will get an outcome they did not anticipate. It's practically on a knife-edge, at 60:40 in favour of no change. The logic for no change centres, in part, on the calming in June inflation readings."

"Our call is for no change. We see inflation expectations tame enough for comfort. Also, the structure of the curve does not shape up for a rate hiking cycle."

"Specifically, the 5yr is rich to the curve. It's unusual for the Fed to start a rate hiking cycle with the 5yr rich to the curve. If we're wrong and the Fed does hike (whether at this meeting or the next), the curve structure suggests that any hikes delivered will be subsequently reversed, and the funds rate ends up lower than it is today within a 12-month window."

"That said, the Federal Reserve could be forgiven for lobbing a protective hike in. It's what central banks tend to do when there is a perceptible rise in inflation over and above preferred ranges. The market has been paving a path towards a hike for this reason, as it's the logical market discount to have."

"One final point – if Warsh is minded to get a hike in (and maybe he is), better to do it at this meeting than to wait for it to be discounted by the market at the next one. The temptation to show some Fed independence vis-à-vis the market must absolutely be there. For clarity, we don't call for a hike."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)