Ceasefire Hopes Lift Risk Appetite, Gold Retreats, Dollar Holds Steady Ahead of Powell

Key Takeaways:

• Russia–Ukraine tensions easing as Trump arranges possible trilateral peace talks with Putin and Zelenskyy.

• Putin signals readiness to meet Zelenskyy within two weeks, raising hopes of a ceasefire.

• Risk appetite improves, leading to a sharp retreat in gold as safe-haven demand eases.

• Dollar Index rebounded slightly but remains range-bound amid Fed rate cut expectations.

Market Summary:

Geopolitical tensions between Russia and Ukraine appear to be easing, with renewed optimism surrounding potential ceasefire arrangements. U.S. President Donald Trump announced via Truth Social that arrangements are underway for a meeting between Volodymyr Zelenskyy and Vladimir Putin, followed by a trilateral discussion involving Trump himself. Trump highlighted that senior U.S. officials, including Vice President JD Vance and Secretary of State Marco Rubio, are coordinating efforts with both Russia and Ukraine. Putin, who had previously resisted direct talks with Zelenskyy, has now signaled his willingness to meet within two weeks, marking a significant diplomatic shift.

Ukrainian President Zelensky welcomed the talks as “very good,” particularly in reference to potential security guarantees. The improved diplomatic tone has lifted global risk appetite, easing concerns over prolonged conflict.

As a result, gold prices retreated sharply, reflecting a decline in safe-haven demand as investors shifted back toward risk assets. Despite the pullback, the broader gold trend remains underpinned by Fed rate cut expectations, though near-term sentiment is weighed by easing geopolitical risks.

Meanwhile, the U.S. Dollar Index rebounded modestly but continues to consolidate as markets await further direction from Fed Chair Jerome Powell. Soft U.S. payrolls and consumer inflation data have bolstered expectations for a 25 basis point cut in September, with the CME FedWatch tool showing an 83% probability. However, last weeks stronger-than-expected producer inflation report has dampened speculation of a more aggressive easing move.

Looking ahead, investors are focused on Powells speech and further Russia–Ukraine developments, which could provide the next key drivers for dollar volatility and overall market sentiment.

Technical Analysis

DOLLAR_INDX, H4:

The Dollar Index is trading higher, currently testing the resistance level of 98.30 and the 30-period moving average (red line). Traders are eyeing a potential breakout — a successful move above 98.30 may open the door for further upside toward the next resistance at 99.05.

Momentum indicators lean slightly positive: MACD shows increasing bullish momentum, while RSI at 54 suggests room for further upside. However, if the index fails to break above 98.30, a retracement back to the support level of 97.75 is likely, with deeper downside risk toward 97.10.

Resistance level: 98.30, 99.05

Support level: 97.75, 97.10

GOLD, H4:

Gold prices are hovering near the key support level of 3330.00, pressured by persistent dollar strength. Technicals remain bearish: MACD signals building downside momentum, while RSI at 39 stays below the neutral 50 line, hinting at continued selling pressure.

A clear break below 3330.00 may accelerate declines toward the next support at 3285.00. Conversely, if support holds, a rebound could send prices back to retest resistance at 3365.00, with further upside capped at 3405.00.

Resistance Levels: 3365.00, 3405.00

Support Levels: 3330.00, 3285.00