Gold set to end 4-month losing streak. How might XAUUSD+ perform in first trading week of August?



At the time of writing, gold is up 1.6% for the month of July 2026.

While those month-to-date gains are being diluted slightly by today's (Fri, July 31) 0.8% decline, the precious metal is still set to end 4 consecutive months of losses:

• June 2026: -11.7%

• May 2026: -1.7%

• April 2026: -1.1%

• March 2026: -11.6%

Also, XAUUSD+ is set to post its first back-to-back weekly gains (+0.5% so far this week) for the first time since April.

Still, it has mostly moved sideways, within the $3925 - $4176 range forecasted by Bloomberg that we shared last week, all while keeping its head above the psychologically-important $4k mark for the time being.

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What did the Fed say this week?

The expected "wild Wednesday" (July 29th) failed to materialize for gold traders.

Here's why:

• 3 Fed officials leaning towards rate hike

The Fed voted 9-3 to keep US interest rates unchanged this week, though those dissenting 3 favoured a rate hike this week.

Recall that gold tends to go down at the thought of US interest rates going up.



• Yet, markets doubt the Fed's inflation fighting commitment

Markets were left rather perplexed by Fed Chair Kevin Warsh's press conference.

Despite his insistence that the Fed aims to deliver on its 2% inflation target (by raising interest rates, among other potential policy moves), some segments of the markets saw it as an empty threat, with the window for the Fed to act getting narrower (hence, markets even braced for a shock hike this week - which didn't happen).

As markets start to doubt the Fed's inflation-fighting commitment, 30-year Treasury yields soared to their highest levels in 20 years (since July 2007)!

Rising Treasury yields in turn put a cap on gold's upside.



Amid such confusing signals, markets now believe there could be a longer runway between now and the next Fed rate hike:

• Before July 29-29 FOMC meeting: near-100% chance of a September rate hike

• Today (Fri, July 31): 65% chance of September rate hike

Conversely, the idea of the next Fed rate hike being delayed, or that the window for the Fed to act is closing, is helping support spot gold above the psychological $4,000 price level.



August 3-7th: Where to next for Gold?



Besides the gyrations in oil prices, as they reflect the ever-fluid Middle East conflict's impact and the global inflation outlook ultimately ...

The next big test for XAUUSD+ traders is the monthly US jobs report due Friday, August 7th.

Bloomberg's model forecasts a 73% chance that Gold will trade between $3950 - $4200 through the first trading week of August 2026.

POTENTIAL SCENARIOS

• UPSIDE: Gold could reclaim the $4200 bi, round number, with its 50-day simple moving average (SMA) lurking nearby for potential resistance, if a weaker-than-expected set of US jobs data prevents the Fed from raising interest rates in September.

• DOWNSIDE: Gold could dip below $4k once more if the US jobs market proves resilient yet again, paving the way for a September rate hike.





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