Gold prices fall to 3353 USD, BTC loses 115,000! The US labor market is very resilient, and the economic backdrop supports the US dollar.

Today (25th) in the European early session, Bitcoin (BTC) fell short-term below 115,000 USD, and gold price touched a low of 3,353 USD. The US labor market is quite resilient, and the service sector is strong, supporting the dollar index which is temporarily reported at 97.56. Recent optimism surrounding potential trade agreements between the US, Japan, and the EU has further weakened the appeal of gold and Bitcoin as defensive assets.

Analysis suggests that the current downside potential for gold remains limited, as the uncertainty surrounding the Federal Reserve's interest rate cut path lingers, and concerns over its independence are exacerbated by increasing political interference, keeping traders cautious. Additionally, the escalation of tensions along the Thailand-Cambodia border has added a geopolitical layer to the market, which has somewhat alleviated the decline of gold.

Economic background supports the dollar: The US labor market is highly resilient, and the service sector is strong

The economic data from the United States released on Thursday highlighted the continued strength of the labor market. The number of unemployment benefit applicants fell for the sixth consecutive week to 217,000, the lowest level since mid-April. At the same time, the S&P Global PMI preliminary reading painted a strong economic picture, with the composite index rising to 54.6 in July. The services sector led the way, climbing to 55.2, marking the highest level of the year, despite a slight contraction in manufacturing.

This strong macroeconomic backdrop has strengthened expectations that the Federal Reserve will maintain interest rates at their current level in next week's policy meeting. Despite ongoing pressure from the White House to lower borrowing costs, the Federal Reserve seems to still prefer a wait-and-see approach, especially in light of rising import costs due to ongoing tariffs.

The Federal Reserve faces pressure, but the US dollar remains strong

President Trump made a rare visit to the Federal Reserve headquarters, directly criticizing Chairman Powell for maintaining his hawkish stance. Federal Reserve Governors Chris Waller and Michelle Bowman—both seen as allies of Trump—publicly called for an immediate interest rate cut at the upcoming meeting on July 30. This growing political pressure has reignited the debate over the independence of the Federal Reserve and could become a source of future volatility for the dollar and gold.

Technical Perspective: Gold finds support at key moving averages, bulls optimistic about a rebound to $3,400

From a technical perspective, gold prices continue to gain initial support near the 100-period moving average (SMA) on the 4-hour chart, currently around $3,351. If this level is successfully maintained, gold prices may rebound to the $3,400 level, with further resistance between $3,438 and $3,440 - this is the upper boundary of the ascending channel formed since early July.

However, if Bitcoin decisively falls below that area, the next support level will be around $3,335, consistent with the downward trend line. A thorough fall below that area could reach the $3,309 region, followed by the monthly low of $3,283-$3,282.

Bitcoin Price Outlook

FXEmpire analyst Bob Mason stated that recent price trends depend on several key driving factors, including the progress of congressional cryptocurrency legislation, developments related to strategic reserve assets, and the liquidity trends of spot ETFs. Possible scenarios:

Bearish scenario: Legislative barriers, the U.S. government's silence on increasing BTC reserves, hawkish statements from the Federal Reserve, and outflows of ETF funds. The combined effect of these factors may push BTC towards $115,000 and potentially reach the 50-day Exponential Moving Average (EMA).

Bullish Scenario: Both parties support the cryptocurrency bill, the U.S. government approves an increase in BTC reserves, the Federal Reserve hints at dovish policies, and ETF inflows. In these scenarios, the price of BTC may reach the historical high of $122,057.

(Source: Trading View)