As the gold price consolidates its previous rebound above $2,400, all eyes are on the upcoming global preliminary business PMI data for fresh trading impetus. Despite a strong US Dollar and Treasury yields, the path of least resistance for gold appears to be to the upside, supported by favorable technicals.
Market Overview
The US Dollar is seeing recovery gains due to risk aversion in the market, with Asian stocks under pressure following disappointing US tech earnings reports. The recent underwhelming performance of tech giants like Google and Tesla has also contributed to the cautious market sentiment. Additionally, concerns over China’s economic slowdown are fueling demand for the Greenback.
On the technical side, the short-term outlook for gold remains positive, with the RSI staying bullish and SMA Bull Cross in play. Resistance levels for gold are at $2,425, $2,450, and $2,484, while support levels are at $2,383, $2,361, and $2,350.
Market Analysis
The upcoming global PMI data will be crucial in determining the health of economies and influencing risk sentiment. Weak data could lead to recession fears, benefiting the US Dollar but also supporting gold prices due to dovish Fed expectations. With markets pricing in a September rate cut, the focus is on upcoming US GDP and inflation data to guide gold price action.
Overall, the current market environment is driven by risk aversion, tech earnings disappointment, and economic data releases. Investors should monitor global PMI data, US corporate earnings, and key economic indicators to make informed decisions about their investments and financial strategies.