Gold (XAU/USD) Hovers at $3350/oz, Russia-Ukraine Developments in Focus

[Redator]

Gold prices have rallied from an overnight low around the $3323/oz handle to a high of $3360/oz before settling around the $3350/oz mark.The precious metal looks set to continue its choppy price action at the start of a busy week.

The recovery in Gold from the overnight low could in part be down to lower US Treasury Yields with the benchmark 10Y US Treasury yield falling from its recent highs.

Russia-Ukraine Developments as Trump and Zelensky Set to Meet

European leaders will meet with Zelenskiy and Trump on Monday to discuss a possible deal to end the Russia-Ukraine war.

Under the proposed plan, Russia would give up small areas of occupied Ukraine, while Ukraine would give up parts of its eastern region that Russia has been unable to take. These ideas were reportedly discussed by Putin and Trump during their summit in Alaska on Friday.

The question moving forward will be whether a peace deal will have a significant impact on Gold prices. The Russia-Ukraine conflict has been running for the better part of three and a half years. It will be interesting to see how much risk premium has been priced into gold as a result and if there will be a significant selloff if a deal is struck.

Either way, this is worth monitoring.

US Dollar Index (DXY) Outlook

The US Dollar Index was higher this morning ahead of what is shaping up to be a busy week. Geopolitical developments, Fed Speak and Jackson Hole are all in focus.

The DXY continues to trade at a key confluence level as rate cut bets from the US Federal Reserve continue to change.

Money markets now see an 83% chance that the Federal Reserve will lower interest rates by a quarter point next month. However, traders have become less certain about a rate cut after recent data showed higher U.S. wholesale prices and strong retail sales in July.

Fed Chair Jerome Powell is set to speak about the economy and the Fed's plans at the Jackson Hole symposium from August 21 to 23.

MUFG Bank predicts the Fed will cut rates in September but doesn’t expect Powell to clearly signal this during his speech. This will be Powell's last address at the conference before his term ends next May, as he balances the Fed's goals of keeping prices stable and unemployment low.

A pivotal week for the greenback and one which could have implications for Gold prices as well.

US Dollar Index (DXY)

Source: Tradingview

Gold Prices Moving Forward

Gold prices continue to hold firm for now with downside potential limited thanks to a host of uncertainties still prevalent in global markets.

Safe haven demand remains in play and this could in part explain Gold's resilience.

The performance of Gold moving forward hinges on potential changes in rate cut bets as well as geopolitical developments.

There is another concern for Gold prices. Given the rally over the last 18 months, Gold's value could lead to a pivot or rotation toward other commodities which continue to play catch-up to gold.So while we could still see some upside in gold, I’d say the bigger opportunity is elsewhere in commodities at this stage of the monetary-macro-metal cycle.

Technical Analysis - Gold (XAU/USD)

From a technical standpoint, on the two-hour chart below we can see that Gold has rejected of the 50-day MA.

Price is however trading just above a key area of support as market participants seek clarity.

The RSI Period-14 remains above the 50 neutral level which is also a sign of bullish momentum.

Either way Golds next move will need a catalyst in either direction for a potential breakout.

Immediate support rests at 3331 before the 3314 and 3300 handle came into foucs.

A move higher first need acceptance above the 50-day MA before the 3361 and 3375 handles come into focus.

Gold (XAU/USD) Daily Chart, August 18, 2025

Source: TradingView (click to enlarge)

Client Sentiment Data - XAU/USD

Looking at OANDA client sentiment data and market participants are Long on Gold with 67% of traders net-long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that the majority of traders are net-long suggests that Gold prices could continue to slide in the near-term.

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