Gold extends gains above $3400, US inflation data in spotlight

Gold held a firm tone on Thursday, breaking through the critical $3400 resistance zone (psychological / Aug 8 peak) and trading at its highest level in nearly three weeks.

Bullish momentum is being fueled by heightened uncertainty surrounding President Trump’s attempt to dismiss a Fed Governor and speculation over the potential replacement of Chair Powell, alongside growing expectations for a Fed rate cut in September.

Although Powell signaled a dovish shift in his latest remarks, he avoided committing to near-term policy action, suggesting that upcoming data—including Friday’s US PCE index and next week’s August labor report—will be pivotal in shaping the Fed’s September decision. Current forecasts point to a steady 2.6% rise in PCE, while weakening employment and rising unemployment are adding to market bets for a rate cut.

From a technical perspective, the daily chart remains largely bullish, with moving averages in full bullish alignment, a confirmed break above the triangle’s upper boundary, and Wednesday’s long-tailed candle all favoring upside continuation. However, strongly overbought stochastic readings and flat 14-day momentum temper the bullish picture, suggesting potential consolidation before another leg higher.

The broken 76.4% Fibo barrier at $3385 should ideally act as a floor, with deeper pullbacks expected to stabilize above $3373 (triangle breakout point) to keep the bullish bias intact.

A firm break above $3400/08 would confirm bullish continuation and expose next targets at $3438 and $3452 (highs of July 23 and June 16, respectively).

Res: 3400; 3408; 3438; 3452
Sup: 3385; 3373; 3367; 3356