Gold Surges 10% in August: Can Fed Minutes Unlock $4,450?

Gold has staged an impressive recovery in August, surging by 10% to reach the $4,400 area. This marks its best week since January and comes after a sharp correction from its January record near $5,600.

The market's attention is now focused on two key events: the release of Fed minutes from the July 28-29 meeting on Wednesday, August 19, and the Jackson Hole conference from August 27-29, where Fed Chair Kevin Warsh will deliver his keynote address. These events could either fuel or stall gold's momentum.

The Middle East remains a source of risk premium, with Israel's strike on Lebanon over the weekend and Trump's plans to impose new sanctions on Iran contributing to market uncertainty. However, China's central bank has continued its gold purchases, adding approximately 20 tonnes in July, its 21st consecutive month of buying.

From a technical perspective, gold is holding above its short- and medium-term moving averages, with the MA structure turning higher. The key breakout came when gold pushed through the previous moving-average resistance cluster at $4,135-$4,158, which has now flipped from resistance to support.

The Fibonacci retracement framework suggests that as long as gold holds above $4,343, the daily structure favors continuation over reversal. However, approaching near-term resistance at $4,436-$4,450 could pose a challenge, with a drop below $4,343 potentially leading to a deeper retracement.

Ultimately, the Fed minutes will be crucial in determining gold's next move. Dovish minutes would reinforce the lower-rate narrative and support gold, while hawkish minutes could lead to a dollar bounce and pressure on gold.