Gold prices have experienced dramatic whipsaw action recently, leaving traders questioning whether the bullish momentum has returned to the market. Following a brief period of uncertainty and directionless trading, XAU/USD managed to find strong support near the $3,268/oz level and has since staged an impressive rebound. This upward reversal was primarily fueled by weakness in the US dollar, itself a result of disappointing Nonfarm Payrolls data that raised concerns over US economic growth and increased expectations for a Federal Reserve rate cut in September.

Market sentiment has become notably more optimistic, with traders now betting on over a 90% chance that the Fed will cut rates next month. Comments from leading Fed officials, highlighting a cooling labor market and subdued inflation, have only strengthened these expectations. These macroeconomic factors have collectively acted as a tailwind for gold, which has rallied sharply towards the $3,400/oz resistance area in the past few trading sessions.

Technical signals reinforce the bullish case. The Alligator indicator has turned upwards after the recent correction, suggesting that momentum could carry gold higher if buyers maintain control. Immediate resistance levels around $3,393-$3,420/oz are now in focus, and a sustained daily close above $3,400/oz would likely pave the way for further gains, potentially opening the door to new highs.

However, it’s important for traders to remain cautious. If sellers regain momentum, a retreat toward the $3,350/oz support level cannot be ruled out. In this environment, gold market participants should closely watch upcoming economic data and central bank commentary, as both will play a crucial role in shaping gold’s next big move. For now, the recent price action signals that bulls are back in the driver’s seat, and the long-anticipated push toward $3,400/oz—and possibly beyond—looks increasingly likely.