The price of gold continues to consolidate above the key level of 4400.00, maintaining the positive momentum gained last week. The primary driver of growth remains the weakening of the U.S. dollar against the backdrop of declining expectations for a Federal Reserve interest rate hike in September. However, geopolitical uncertainty and persistent inflation risks related to oil prices limit the potential for further growth.

At the time of writing, XAU/USD was demonstrating resilience, trading around 4423.00, recovering from a recent drop below 4300.00. The renewed pressure on the U.S. dollar is the main supporting factor.

The decrease in expectations for a Fed rate hike has been a key catalyst. According to the CME FedWatch Tool, the probability of a rate hike in September has fallen to about 33% from over 50% a week earlier.

This change followed a series of weak economic data from the U.S., including a disappointing non-farm payrolls (NFP) report, cooling inflation (as per CPI and PPI indices), an unexpected 0.6% drop in retail sales in July, and a decline in the University of Michigan Consumer Sentiment Index to 51.0.

Concerns about geopolitical tensions in the Middle East and the situation around the Strait of Hormuz continue to support oil prices, which, in turn, keep inflationary risks on the agenda and create uncertainty for the Fed.

Brief Technical Analysis

From a technical perspective, XAU/USD maintains a bullish medium-term bias, consolidating above the 50-day and 200-day moving averages, but faces strong resistance around 4400.00.

On the Daily Chart:

• EMA50 is around 4235.00. The price is significantly above this level, confirming the persistence of the bullish momentum.
• EMA144 is located near 4340.00.
• EMA200 is around 4290.00, forming a key long-term support level. A breakout below this level followed by a further increase, indicates a transition to a sustainable bull market.
• RSI (14) is around 65-66, approaching the overbought zone, which may signal a correction or consolidation.
• OsMA is in positive territory, confirming the persistence of bullish momentum alongside the positive zone it remains in.

Key Events to Watch

Conclusion and Recommendations:

The XAU/USD pair is in a consolidation phase above the important resistance level of 4400.00, where a weakening dollar and reduced Fed rate-hike expectations create a foundation for further growth. However, technical resistance and ongoing uncertainty regarding geopolitical and monetary policies limit growth potential. The key catalysts will be the FOMC minutes on Wednesday and the Jackson Hole symposium at the end of August.

For Short-Term Traders:

• Enter long positions upon a sustained breakout at 4445.00, targeting 4550.00-4600.00 with a stop-loss below 4375.00.
• Consider short positions only upon a breakout at 4290.00 with confirmation from fundamental factors (hawkish Fed signal or strengthening dollar) and a stop-loss above 4340.00.
• Pay close attention to FOMC minutes and comments from Fed representatives—unexpected signals may trigger sharp movements.

For Medium-Term Investors:

• Take a constructive position, given the weakening dollar and reduced expectations for Fed rate hikes.
• A potential correction to 4214.00 (EMA200 on the 4-hour chart) - 4235.00 (50-day EMA) can be used to build long positions while maintaining a positive fundamental backdrop.
• Consider forecasts from major banks: UBS expects gold to rise to 5500.00 by the end of the year, while J.P. Morgan does not rule out a move back to 5000.00 under favorable conditions.

Risk Management:

• Remain cautious ahead of the publication of FOMC minutes and the Jackson Hole symposium—volatility may be high.
• Strictly adhere to stop-losses—breakouts of key levels can trigger significant moves.
• Monitor inflation data and comments from Fed representatives, which remain key drivers.
• Keep in mind that rising oil prices amid geopolitical tensions may revive inflationary risks and return hawkish rate expectations from the Fed, limiting gold's growth.