Wall Street cautious after gold's lack of follow-through, Main Street bullish with Fed decision on deck
Kitco
Published: Jul 25, 2026, 07:46 AM GMT+9
Sentiment Analysis
Gold prices rebounded during another volatile week, as bargain-hunting and softer Treasury yields helped the precious metal recover from an early drop below $4,000 per ounce, even as stronger U.S. labor data, a resilient dollar, and persistent inflation risks capped the subsequent rally. Spot gold kicked off the week trading at $4,015.83 per ounce on Sunday evening, but the yellow metal quickly came under pressure as traders continued to price in higher energy costs, renewed U.S.-Iran tensions, and the risk that the Federal Reserve could keep policy restrictive for longer. The selling carried into Monday, when gold set its weekly low at $3,982.32 per ounce before buyers stepped back in near the lower end of the recent range. Gold recovered steadily through Tuesday and Wednesday as Treasury yields eased from recent highs and the U.S. dollar lost momentum, allowing prices to climb back above $4,100. The rally accelerated after traders looked past the European Central Bank’s decision to hold rates steady and focused instead on easing oil prices, which helped cool some of the week’s inflation concerns. Spot gold ultimately set its weekly high at $4,165.71 per ounce just before noon on Wednesday. The rebound faded Thursday after initial jobless claims dropped to 187,000, their lowest level in decades, reinforcing expectations that the U.S. labor market remains strong enough to keep the Fed focused on price stability. Gold broke back below $4,100 as the dollar firmed and traders trimmed exposure ahead of next week’s FOMC decision, even as lingering Middle East risks continued to provide some safe-haven support. After stabilizing Friday but failing to reclaim $4,100, spot gold closed the week at $4,051.51 per ounce, leaving the metal higher on the week but still stuck near the middle of its recent range.
The latest Kitco News Weekly Gold Survey showed Wall Street bearish or undecided on gold’s near-term prospects, while Main Street sentiment remained improved after the yellow metal defended $4,000 support once again.
“Sideways,” said Darin Newsom, senior market analyst at Barchart.com. “From a technical or fundamental point of view, I don’t see much reason for the December futures contract to break out of its daily close range between $4,048.70 (July 16) and $4,210.30 (July 22). From Watson’s point of view (algorithm-based trading), the 45-day moving average is well above the market (calculated at $4,297.40 Friday morning).”
“The last time Dec gold closed above its 45 DMA was March 16 ($5,150.30 to $5,148.00),” Newsom added. “Additionally, daily stochastics and implied volatility are both neutral heading into the weekend.”
“Up,” said Adrian Day, president of Adrian Day Asset Management. “Although cautiously optimistic, we are not out of the woods yet, with the possibility of the Federal Reserve raising rates even as China’s economy slows and stimulus measures are put in place. It is encouraging that gold is unchanged over the past seven days--down then up--in the face of an intensifying conflict in Iran, a higher oil price and higher dollar, and expectations of Fed hikes before the end of the year jumping.”
“When an asset, any asset or market, does not drop in the face of negative developments, that is a bullish sign.”
“Unchanged,” said Rich Checkan, president and COO of Asset Strategies International. “We have two forces working solidly against each other here… oil over $100 per barrel and strong support at $4,000. After multiple tests of support at $4,000, I see that continuing to hold. But as long as the tensions in the Middle East keep oil prices and inflationary fears elevated, it will be difficult for gold to move significantly higher.”
“Brent crude crossing $100 has dealt a heavy blow to gold with the chain reaction now well established,” said Lukman Otunuga, manager of market analysis at FXTM. “Elevated oil prices are stoking inflation fears which have boosted Fed hike bets. This has led to a stronger dollar and...
Source: Kitco
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