Gold lifts to $3,324.60 but upside stalls as yields, Fed, and ETF flow weigh heavy
Gold (XAU/USD) bounced to $3,324.60 on July 29 in late-session trading, rising +0.31% as buyers stepped in below $3,315. The move came after three straight sessions of range-bound compression, with price carving a short-term base above $3,312. However, upside was limited by persistent headwinds — real yields remain elevated, ETF demand is deteriorating, and the upcoming FOMC decision on July 31 casts a long shadow. Despite intraday strength, gold failed to break the high-volume resistance zone between $3,328 and $3,335, where options activity and long liquidation zones cluster heavily.
Yields firm into Fed week: 10Y at 4.35%, real rates hold above 2%
Bond market pricing continues to tighten financial conditions. The 10-year Treasury yield held firm at 4.35%, while 2-year notes traded at 4.67%, both levels indicating the market no longer expects a September rate cut. Critically, real yields (TIPS-adjusted) remain above 2.00%, their highest since Q3 2023. These are deeply negative for non-yielding assets like gold. Traders expect Powell to reaffirm a hawkish pause rather than pivot, especially after the Employment Cost Index (ECI) showed a 1.1% QoQ increase, confirming sticky wage inflation. Until real rates fall, gold rallies will likely be capped by macro pressure.
Soft labor signals meet firm inflation: no easy Fed read for gold bulls
U.S. labor data is deteriorating beneath the surface. The latest JOLTS report showed job openings at 8.9 million, missing estimates. But quits remain high and wage growth is still sticky. The Atlanta Fed Wage Tracker remains at 4.8% YoY, well above the Fed’s comfort zone. This stagflation-lite backdrop is supportive for gold long-term, but confusing for near-term price action. The Fed cannot pivot on jobs weakness alone without inflation cooperation — and gold remains trapped between those opposing forces.
ETF demand fading: GLD sees $178M outflows, IAU flat, central banks diverge
ETF flows show declining investor conviction. SPDR Gold Shares (GLD) posted net outflows of $178 million this week, and iShares IAU saw zero inflows. Global ETF holdings are down 0.6% on the month. Meanwhile, central bank demand is mixed. China added gold for the 14th straight month (WGC estimate: +12.2 tons), but Turkey reduced reserves for the second time this quarter. Total net central bank buying for July is projected at 34.1 tons, down from May’s 54-ton pace. Retail demand is also soft: India reported a 9% YoY drop in jewelry sales, and U.S. Mint gold coin sales were flat. This lack of fresh demand is what’s preventing XAU/USD from reclaiming the $3,340–$3,360 breakout zone.
Technical picture neutral: $3,328 remains resistance, RSI stalls at midline
Gold’s technicals reflect indecision. The daily RSI prints at 52.1, just above the neutral midpoint. Price is trading just above the 20-day EMA at $3,320.80, but beneath the 50-day EMA at $3,337.90. A close above $3,335 is needed to flip the short-term structure bullish. The MACD histogram is flat but tilting up — a possible crossover setup forming this week. If bulls can break $3,340, the next resistance is $3,364, then the April high at $3,396. On the downside, firm support sits at $3,312, followed by $3,292, the 100-day moving average. A breakdown below $3,275 would trigger CTA selling and expose $3,245 next.
Correlation with dollar remains weak, Bitcoin drains marginal flows
The U.S. Dollar Index (DXY) rose to 98.89, but gold decoupled slightly, advancing in spite of USD strength. This suggests gold is now more sensitive to real yields and Fed policy than to currency fluctuations. Meanwhile, Bitcoin (BTC-USD) is drawing capital away from gold. Institutional desk data shows rotation into BTC futures and options, and CME data confirms open interest in Bitcoin outpaced gold last week — a historic first. While this doesn’t break gold’s long-term case, it does fragment marginal inflows that previously supported physical and ETF channels.
Sentiment fading: retail flows flat, funds sidelined ahead of Powell
Sentiment remains subdued across investor categories. The latest Commitment of Traders (COT) report shows managed money gold net longs fell to 141,700 contracts, their lowest in six weeks. Reddit activity on gold investing is down 18% week-over-week, and Twitter mentions of “gold breakout” have nearly vanished. Google Trends search interest for “buy gold” is flatlined. With the FOMC and Powell’s press conference due in 48 hours, funds are staying sidelined, waiting for clarity on yield direction and inflation targets. No fresh catalyst, no fresh positioning.
Verdict: HOLD — Gold steady at $3,324.60 but needs Fed dovish pivot or real yield drop to break higher
Gold’s recovery to $3,324.60 reflects defensive positioning and mild bid demand — not conviction. ETF outflows, strong real yields, and lackluster central bank appetite cap upside. Unless Powell signals a policy shift or real yields fall back below 1.8%, gold will remain rangebound. The structure is firm but fragile. Until $3,335–$3,340 breaks decisively, XAU/USD remains a HOLD — not a breakout, not a breakdown, just a macro waiting game.
