Gold’s sharp rebound is approaching a critical technical inflexion point as softer Fed rate-hike expectations and improving momentum raise the prospect of a multi-week bullish reversal.
Key takeaways
- Softer US jobs data has reduced Fed rate-hike expectations, lowering the opportunity cost of holding gold and supporting its rebound.
- Gold has reclaimed its 20- and 50-day moving averages, while positive MACD momentum reinforces a potential bullish reversal.
- A break above $4,504 may expose $4,640 and $4,765, while a daily close below $4,180 would invalidate the bullish scenario.
Gold (XAU/USD) has recorded a 6-month corrective decline of 29.6% from its all-time high of $5,602, set on 29 January 2026.
Interestingly, the precious yellow metal may have formed a medium-term bullish bottoming pattern during the week of 3 August 2026, supported by less hawkish US Federal Reserve policy-rate pricing, as indicated by CME FedWatch data (see Fig. 1).
A less hawkish Fed policy-rate pricing reduces opportunity costs for gold
Fig. 1: FOMC aggregated meeting probabilities as of 11 Aug 2026 (Source: CME FedWatch tool). The information presented is historical information, and past performance is not indicative of future performance.
Based on the latest data from the CME FedWatch tool, the probability of a 25-basis-point hike on the Fed funds rate to 3.75%-4.00% for the next FOMC meeting on 16 September 2026 has been reduced to almost a coin flip of 51.32% due to the negative US non-farm payrolls data for the July release on Friday, 7 August 2026 (consensus: 80K, actual: -23K).
A softer US labour market is likely to indicate that the Fed is not in a rush to hike rates, which, in turn, may reduce the opportunity cost of holding gold, a non-income-bearing asset, creating a positive feedback loop for gold prices.
Let’s now unpack the latest technicals on gold.
Gold’s recent rally is approaching a key inflexion level of $4,504
Fig. 2: Gold (XAU/USD) medium-term trend as of 11 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The recent swift rebound of 10.3% in gold (XAU/USD) from the 3 August 2026 low of US$4,019 is now fast approaching the $4,504 key inflexion level, defined by the 200-day moving average and the upper boundary of the medium-term descending channel from the 29 January 2026 all-time high.
Several positive technical elements suggest the ongoing gold rally may continue (see Fig. 2).
Firstly, price action has formed a weekly bullish reversal candlestick pattern for the week of 3 August 2026, with a weekly close above the upper bodies of the candlesticks formed over the prior seven weeks.
Secondly, price action has surpassed the 20- and 50-day moving averages. Thirdly, the 4-hour MACD trend indicator has continued to trend upward steadily above its centreline.
Watch the $4,180 key medium-term pivotal support; a clearance above $4,504 may see the next medium-term resistances at $4,640 and $4,765.
However, a daily close below $4,180 invalidates the bullish tone, opening the door to a deeper corrective decline that could expose $4,075 (also near the 20-day moving average) and the $3,964/3,886 major support zone.
This article and its contents are intended for educational purposes only and should not be considered trading advice.
