As the world’s best investment manager and financial market journalist, I am here to provide you with the latest insights on the Gold market. Gold has extended its correction and slid down to a technical range floor, defying the typical safe haven status it holds during times of global growth fears.
Despite the usual trend of investors hoarding Gold in times of uncertainty, the precious metal has joined most other commodities in a sell-off. This decline can be attributed to technical selling and the release of marginally favorable US S&P Global Purchasing Managers Index (PMI) data for July, which eased fears of “stagflation.”
Gold Weakens on Technical Selling and US PMI Data
Gold’s decline on Thursday was influenced by the improved preliminary S&P Global Composite PMI data for July, which showed a robust pace of economic growth while inflation moderated. Despite expectations of multiple interest rate cuts by the Federal Reserve, Gold’s weakness persisted as traders awaited more US economic data for clarity on the trajectory of interest rates.
Additionally, the unwinding of the “Trump trade” and expectations of increased physical demand from India following a reduction in Gold import taxes have impacted Gold prices.
Technical Analysis: Gold Continues Oscillating in Range
Gold is currently undergoing a downward movement within its trading range, with the potential to fall towards the floor and the 100-day Simple Moving Average (SMA) at around $2,320. The Moving Average Convergence Divergence (MACD) indicator has crossed below its signal line, indicating a bearish trend.
While a break above the $2,483 all-time high could signal a breakout to the upside, Gold’s next upside target is estimated at roughly $2,555-$2,560.
Analysis and Conclusion
In conclusion, the current decline in Gold prices can be attributed to technical selling, improved US economic data, and geopolitical factors. Despite expectations of interest rate cuts and physical demand from India, Gold continues to oscillate within its trading range.
For investors, it is important to monitor key economic data releases and geopolitical developments that could impact Gold prices. Understanding the technical analysis and market trends can help investors make informed decisions about their Gold investments.