Gold’s (XAU/USD) Next Move: Awaiting Catalyst Amidst Choppy Markets and Strong US Dollar

Gold prices remain choppy with yesterday’s post CPI decline limited as the precious metal found support around the 3320 handle.

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The precious metal has continued its recovery today as it eyes a return to the 3350 handle which had held as a key area of support on Monday. For now though, price is choppy and it would appear that the precious metal is in desperate need of a catalyst to facilitate its next move.

Gold prices faced selling pressure yesterday as the US Dollar enjoyed its best day in a month.The lack of geopolitical risk of late means that the precious metal may once again be more susceptible to US Dollar moves in the near future.

Gold prices had been running more on safe haven appeal this year, although US dollar weakness did aid its rally. However there have been times where Gold shrugged off US Dollar strength and continued to rise due to rising geopolitical risks.

The US Dollar could continue to strengthen in the months ahead as tariff impacts will finally be felt across the globe as the August deadline approaches. The full impact of tariffs on inflation will become clearer over the next three months. Should inflation continue to rise moving forward, it will be harder for markets to justify expecting a rate cut in September unless job data takes a sharp downturn.

Today’s PPI data will shed more light on the inflation picture, and any surprises could move markets. However, expectations are set for a modest 0.2% month-on-month increase in both headline and core PPI.

Investors will also look to the Fed’s Beige Book, out tonight, for insights into regional inflation and economic trends. Additionally, several Fed officials such as Lorie Logan, Thomas Barkin, Beth Hammack, Raphael Bostic, and John Williams are scheduled to speak today.

With the Fed’s blackout period starting on July 19, these could be the last comments before then. However, yesterday’s data likely hasn’t shifted their policy stance toward a more dovish approach.

For now, any moves may remain short-lived and thus the need for a fresh catalyst to aid Gold prices in finding some direction. In the absence of a major catalyst, Gold prices could remain choppy and rangebound.

From a technical standpoint, Gold has been stuck in a period of consolidation since printing all-time highs around $3500/oz.

As you can see on the chart below, price action has been choppy since with higher highs followed by lower lows rather than lower highs as you would see in trending markets.

There is a triangle pattern which is in play and Gold is not too far away from the lower trendline of the triangle pattern.

Should Gold prices hold above the lower trendline of the triangle pattern, a move higher may be in offing. A break of the triangle pattern to the upside could set Gold up for a potential $380 move to the upside with potential targets around the $3800/oz mark.

For now though immediate support is provided by the 50-day SMA which rests at 3323 before the swing low at 3301 comes into focus. Below that we have further support areas around 3275 and 3218 respectively.

Looking at the upside, immediate resistance may be found at 3350 before the 3375 and 3400 handles come into focus.

Gold (XAU/USD) Daily Chart, July 16, 2025

Looking at OANDA client sentiment data and market participants are long on Gold with 62% of traders net-long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are long means Gold prices could decline in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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Zain is an experienced financial markets analyst and educator with a rich tapestry of experience in the world of retail forex, economics, and market analysis. Initially starting out in a sales and business development role, his passion for economics and technical analysis propelled him towards a career as an analyst.

He has spent the last 3 years in an analyst role honing his skills across various financial domains, including technical analysis, economic data interpretation, price action strategies, and analyzing the geopolitical impacts on global markets. Currently, Zain is advancing in obtaining his Capital Markets & Security Analyst (CMSA) designation through the Corporate Finance Institute (CFI), where he has completed modules in fixed income fundamentals, portfolio management fundamentals, equity market fundamentals, introduction to capital markets, and derivative fundamentals.

He is also a regular guest on radio and television programs in South Africa, providing insight into global markets and the economy. Additionally, he has contributed to the development of a financial markets course approved by BankSeta (Banking Sector Education and Training Authority) at NQF level 6 in South Africa.