Daily Gold Commentary | How Did This Crucial Event in the Early Morning Affect Gold Prices?

On the fundamentals side, the Federal Reserve's July meeting minutes released early this morning sent a clearly hawkish signal: three members advocated a 25-basis-point rate hike, and most officials warned that if inflation cannot effectively decline, rates need to be increased as soon as possible.

Theoretically, this tightening expectation would suppress international gold prices by driving up the US dollar and US Treasury yields. However, after the minutes were published, the market reaction was complex; the trend did not show a unilateral decline, mainly because nonfarm employment unexpectedly decreased by 23,000 in July. Weak economic data cooled bets on a September rate hike (with about a 65% probability for rates to remain unchanged), putting pressure on the US dollar and US Treasury yields, which in turn provided short-term support to international gold prices.

Additionally, Federal Reserve Chairman Waller unexpectedly proposed reducing the annual number of FOMC meetings from eight to six. If this adjustment takes effect, the longer interval between meetings would make each event more information-dense, increasing monetary policy uncertainty and potentially amplifying short-term volatility in the gold market. The minutes also pointed out that overall financial system vulnerability remains significant, hedge fund leverage is near historic highs, and combined with geopolitical risks in the Middle East, risk aversion in the market remains strong. Overall, although the hawkish tone of the minutes acts as resistance to international gold price gains, signs of economic cooling, US dollar weakness, and potential systemic financial risks continue to provide strong bottom support for gold.

From a technical perspective, this week's bull-bear watershed at $4,379/oz has been left far below, and the first resistance at $4,447/oz has already been broken, indicating that bulls clearly dominate the market now. If international gold prices can firmly hold above $4,518/oz, the upside will open further, with targets at the $4,550~$4,565/oz range. Conversely, if a rally fails and falls below $4,447/oz, this level will return as a support test, with the first support at $4,308/oz and the second at $4,240/oz. The $4,310~$4,308/oz area is the defensive bottom line for the current rally; only a valid breakdown would count as a trend reversal.