Gold does a 180-degree reversal from bearish to bullish sentiment prior to the release of the Fed minutes

The precious metals market experienced significant movement today as gold futures climbed $31 to approximately $3,390 per ounce, coinciding with the 2:00 PM ET release of the Federal Reserve's July FOMC meeting minutes. However, the timing of these gains suggests that factors beyond the Fed's policy deliberations drove the day's bullish momentum.

The July FOMC minutes unveiled a notable schism within the Federal Reserve's leadership regarding the appropriate monetary policy path forward. While the majority of officials maintained that it remains premature to implement rate cuts despite mounting concerns over inflation dynamics and labor market softening, two governors' broke ranks to advocate for immediate rate reduction. This dissent marks the first instance of multiple-governor opposition to a policy decision in over three decades, signaling the increasing complexity of the current economic environment.

The significance of this division extends beyond mere procedural disagreement. It reflects the challenging balance the Fed must strike between combating persistent inflationary pressures and addressing signs of economic deceleration. With market participants pricing in an 85% probability of a September rate cut, the Fed finds itself navigating between market expectations and internal policy consensus.

Goldman Sachs Forecast Supports Long-Term Bull Case

A critical factor underpinning today's gold rally appears to be Goldman Sachs' reaffirmation of its ambitious $4,000 per ounce price target for mid-2026. This forecast rests on several structural pillars that extend beyond immediate monetary policy considerations. The investment bank cites sustained central bank demand as a foundational support, reflecting the ongoing trend of global monetary authorities diversifying their reserve portfolios toward gold.

Additionally, Goldman Sachs anticipates continued ETF inflows driven by the prospect of easing Federal Reserve monetary policy and a notable 30% probability of U.S. recession within the next twelve months. This recession risk assessment provides a compelling narrative for gold's traditional role as a safe-haven asset during periods of economic uncertainty.

Technical Analysis Signals Momentum Shift

From a technical perspective, gold's performance today represents a significant inflection point. The $31 gain effectively terminated what would have been a concerning five-day losing streak, demonstrating the metal's resilience at current levels. More importantly, gold futures successfully reclaimed their position above the critical 100-day simple moving average, having closed below this key technical indicator just yesterday.

This breach of the 100-day SMA was particularly noteworthy given that it represented only the second such occurrence since January, highlighting the strength of the prevailing uptrend throughout most of 2025. The swift recovery above this average suggests that institutional and algorithmic trading systems may view current levels as attractive entry points.

Jackson Hole Symposium Looms Large

Looking ahead, tomorrow's Jackson Hole Economic Symposium presents the next major catalyst for gold price direction. Federal Reserve Chair Jerome Powell's anticipated speech will be closely scrutinized for signals regarding future monetary policy trajectory. Given that the July minutes revealed only two voting members dissented in favor of rate cuts, the Fed would face significant challenges in dampening current market optimism for September policy easing.

The confluence of factors supporting gold's current trajectory—from Goldman Sachs' bullish long-term outlook to technical momentum signals and Fed policy expectations—suggests that the precious metal has established a solid foundation for continued strength. However, Powell's Jackson Hole remarks could either reinforce this momentum or introduce new variables into the equation. 

Wishing you as always, good trading,