At the start of the week, gold is struggling to recover. The price is currently attempting to break through the 3350 level, showing slight gains during the first half of the European session. The main factor restraining the growth of this safe-haven asset is the strengthening of the U.S. dollar, which begins the new week on a positive note. 
This is due to reduced expectations for more aggressive monetary easing by the Federal Reserve, which diminishes gold's appeal as a hedge against dollar weakness. Additional market tension is being driven by upcoming negotiations between U.S. President Donald Trump, Ukrainian President Volodymyr Zelensky, and European leaders on a potential peace agreement with Russia. These events increase uncertainty and may influence the dynamics of both risk assets and safe-haven assets such as gold. At the same time, growing expectations that the Fed will resume its rate-cutting cycle as early as September could limit further dollar strength and support the precious metal.
Data released last Thursday showed that U.S. producer prices in July rose at the fastest pace since 2022, reducing the likelihood of a 50-basis-point rate cut by the Federal Reserve. This has strengthened the dollar at the start of the week, as investors interpret it as a signal for maintaining a tighter monetary stance. Additional data from the University of Michigan indicated rising inflation expectations: one-year expectations increased from 4.5% to 4.9%, while five-year expectations climbed from 3.4% to 3.9%. This points to mounting price pressures and sets the stage for continued Fed efforts to combat inflation.
However, given current market sentiment and persistent uncertainty, investors are advised to exercise caution when making long-term decisions on gold positions and closely monitor developments. It is also worth remembering that geopolitical events remain a crucial factor. They may boost demand for safe-haven assets and significantly affect the price of the precious metal.
From a technical perspective, prices showed strength below the 3330.50 level, while resistance was found at 3353.00. If prices fall toward the 100-day SMA near the round 3300.00 level, bears will gain broader control. A breakout above 3353.00 and consolidation higher would open the way toward 3375.00, with the round 3400.00 level becoming the main target thereafter. Oscillators on the daily chart are mixed, while the Relative Strength Index is negative, indicating that bears are still actively resisting bullish momentum.
