As the trading day begins on Friday, the gold price remains steady after bouncing off the $2,350 level. The US Dollar’s attempt to rebound is faltering due to US Treasury bond yields, which is supporting the upswing in the gold price. Concerns about China’s economic troubles persist, while the odds of a September Fed rate cut remain intact. Gold buyers are defending the 50-day SMA at $2,360 as they await the release of the monthly US PCE data.
Analysis: Will US Inflation Data Impact Gold Price?
The US GDP expanded at a rate of 2.8% in Q2 2024, doubling from the previous quarter. Despite this growth, the US Dollar’s reaction was short-lived as markets focused on the core PCE inflation and Jobless Claims data. The core PCE deflator rose 2.9% in Q2, down from the previous quarter, indicating a moderation in inflationary pressure. Initial Jobless Claims also dropped, signaling a positive trend in the labor market.
Despite the strong economic growth, markets are still anticipating a Fed rate cut in September due to ongoing disinflation. Gold price initially dropped after the US GDP release but recovered above $2,360 on softer core PCE inflation data. The sell-off in gold was also influenced by concerns about China’s economic slowdown and weakening USD/JPY pair.
Looking ahead, the US core PCE Price Index is expected to show a slight increase in June, which could impact gold buyers’ sentiment. End-of-week flows and position adjustments may increase volatility in the gold price ahead of the Fed policy announcements and Nonfarm Payrolls data next week.
Technical Analysis of Gold Price
Gold sellers are currently in control, with the RSI below 50 and testing the 50-day SMA at $2,360. A daily close below this level could lead to a downtrend towards the 100-day SMA at $2,324. Buyers may find support at the psychological level of $2,350. Resistance levels are seen at the 21-day SMA at $2,387, $2,400, $2,412, and $2,425.
Overall, the gold price remains influenced by economic data and market sentiment, with key support and resistance levels guiding the price movements.