Gold Prices Under Pressure Below $4,200 as Market Awaits Fed Minutes

Gold prices (XAUUSD) are under pressure below $4,200 as investors await the Federal Reserve's meeting minutes on July 8. The market has been fluctuating since the Asian session on July 7, with gold prices weakening near $4,140.

The recent rebound in gold prices, which had touched the resistance level of $4,200, was met with short-term profit-taking by bulls, causing a two-day pullback. The dollar's rebound weighed on gold prices, but cooling expectations for Fed rate hikes limited the downside.

From a fundamental perspective, the core driver of the recent rally in gold prices is the weaker-than-expected U.S. non-farm payrolls data released last week. This has reinforced the view that the labor market is cooling and dampened expectations for further Federal Reserve rate hikes, reducing the need for the Fed to maintain an aggressive stance.

However, after a consecutive rally, the bullish impact of the payrolls data has been largely priced in by the market. Ahead of the minutes release, short-term capital is inclined to lock in profits rather than pushing gold prices above $4,200.