Gold Is Preparing for a Breakout above $3,450

Gold prices fell 1.6% this week to $3,347 per troy ounce, recovering slightly from Tuesday’s low of $3,331 after hitting support in the $3,330–$3,350 range and rebounding, suggesting the summer consolidation phase may be ending. Large investors are signalling an imminent spike in activity, with $744.3 million worth of SPDR Gold Trust (GLD) ETF shares purchased last week, following $1.37 billion in net inflows the week before and another $500.1 million this week,  a pattern pointing to the potential for a 5–7% rally.

Geopolitical factors offer little clear trigger, as the U.S. and China extended their trade truce for 90 days, while any risk from the planned Trump–Putin meeting in Alaska appears remote. Instead, U.S. macroeconomic developments seem the likeliest driver, aligning with heavy American institutional buying. Investors appear to be positioning for growing White House pressure on the Federal Reserve, with U.S. Treasury Secretary Scott Bessent arguing that if May and June labour market data had been accurate, rates would already have been cut by at least 25 basis points. He has since called for a 50 basis point cut in September and suggested the appropriate rate is 1.50–1.75 percentage points lower than current levels.

In such conditions, the U.S. Dollar would likely weaken, raising the odds of EURUSD moving toward 1.19000–1.20000, a 2.5–3.0% drop in the Greenback, which would directly benefit gold. Key resistance sits at $3,500–$3,600, with an extreme target of $3,850–$3,950. From a technical perspective, a breakout from the $3,250–$3,450 range is now possible, and given the scale of institutional buying, a move above $3,450 is more likely than a breakdown, making price action near $3,600 crucial to watch.