Last Updated on 18/08/2026
Gold rebounds as softer USD and fading Fed hike bets lift XAU/USD
- Gold recovers from a fresh weekly low as renewed US Dollar weakness provides support.
- Softer US economic data and easing inflation reduce expectations for a September Fed rate hike.
- XAU/USD remains capped by the 100-day SMA, with the $4,386–$4,455 zone acting as key resistance.
Gold (XAU/USD) rebounds on Friday after slipping to a fresh weekly low of $4,311 earlier in the session. The precious metal trades near $4,381 at the time of writing, supported by a weaker US Dollar and declining expectations of an imminent Federal Reserve interest rate hike. However, Gold remains below Thursday’s two-month peak of $4,449.
Fresh US economic data reinforced concerns that economic momentum is slowing. Retail Sales dropped 0.6% month-over-month in July, significantly below expectations for a 0.1% rise and reversing June’s 0.2% increase.
The disappointing spending data comes after this week’s CPI and PPI reports pointed to gradually easing inflationary pressures. However, preliminary University of Michigan figures showed that one-year inflation expectations rose slightly to 4.3% in August from 4.2%, while the five-year expectation remained unchanged at 3.3%.
The weaker economic data has pushed short-term Treasury yields lower and pressured the US Dollar as markets scale back expectations for a September Fed rate hike. The US Dollar Index (DXY) is trading around 99.50, down approximately 0.45% on the day.
According to the CME FedWatch Tool, markets are now assigning roughly a 71% probability that the Fed will leave interest rates unchanged next month.
This environment remains broadly supportive for non-yielding Gold in the near term, although the inflation outlook remains uncertain. Inflation is still above the Fed’s 2% target, while energy-related price pressures have yet to fully ease amid continued uncertainty surrounding the reopening of the Strait of Hormuz.
TD Securities noted that CTA net-long positioning in Gold is becoming increasingly established alongside renewed discretionary buying. The bank expects the precious metal to remain well supported at elevated levels if the Fed stays on hold amid weaker economic data, even with higher energy prices.
Technical analysis: XAU/USD faces resistance at the 100-day SMA
XAU/USD remains close to recent highs but has yet to achieve a convincing break above the 100-day Simple Moving Average (SMA) at $4,386. Gold continues to trade comfortably above the 20-day SMA, which coincides with the Bollinger middle band around $4,173.
The daily RSI is near 62, while the MACD remains in positive territory, indicating that bullish momentum is still intact and could support another attempt to break higher.
On the upside, the $4,386–$4,455 area represents a significant resistance zone, defined by the 100-day SMA and the upper Bollinger Band. A sustained move above this region could reinforce the bullish outlook and open the door to further gains.
On the downside, initial support lies around $4,173 at the Bollinger middle band, followed by the psychological $4,000 level. A deeper correction could expose the lower Bollinger Band near $3,891.
Forex Today
The US Dollar starts Tuesday under pressure, with the US Dollar Index (DXY) hovering near two-month lows and remaining below the 100.00 threshold. A string of weaker-than-expected US data covering employment, inflation and retail sales has reduced expectations for a Federal Reserve rate hike next month.
Meanwhile, geopolitical tensions in the Middle East are supporting commodities. A senior Iranian official said Tehran is adopting a “fully offensive” posture and warned that tensions around the Strait of Hormuz could escalate if diplomatic efforts fail. The comments pushed Crude Oil more than 2% higher and provided additional support for Gold.
US Dollar performance today
The US Dollar is broadly weaker against most major currencies, with the largest declines seen against the Australian Dollar, New Zealand Dollar and Swiss Franc. The Greenback is strongest against the Japanese Yen, while its performance against the Canadian Dollar remains broadly unchanged.
EUR/USD holds near 1.1580 after pulling back from a two-month high around 1.1614, with Dollar weakness continuing to underpin the pair.
GBP/USD remains firm around the mid-1.3500s, close to three-month highs as traders await Tuesday’s UK labor market data.
USD/JPY trades around 159.00 after markets largely looked past weaker-than-expected Japanese second-quarter GDP data.
AUD/USD remains near the lower 0.7100s and leads the major currencies despite softer Chinese Industrial Production and Retail Sales figures released over the weekend.
Gold extends its recovery above $4,400 as a weaker US Dollar and heightened Middle East tensions boost demand for the precious metal.
WTI Crude Oil climbs toward $84.00 per barrel as renewed Iranian threats increase the geopolitical risk premium in energy markets.
Key economic events ahead
Tuesday’s Asian session begins with Australia’s Westpac Consumer Confidence report. Attention then shifts to the UK labor market report, with the Bank of England particularly focused on Average Earnings and the ILO Unemployment Rate.
Later, Germany and the Eurozone will release ZEW economic sentiment data, while European Central Bank Executive Board member Philip Lane is scheduled to speak.
The US session features Building Permits, Housing Starts, Industrial Production and Pending Home Sales, providing further clues about the health of the US economy. New Zealand’s second-quarter Producer Price Index will round out the day’s major releases.
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