Gold price is pulling back from recent highs as traders lock in gains ahead of key US inflation reports. The US Dollar is also stabilizing amid pre-US CPI anxiety and geopolitical risks in the Middle East.
Key Events Impacting Gold Price
Investors are eagerly awaiting the upcoming US inflation data to assess the possibility of a significant interest rate hike by the Federal Reserve. The recent weak jobs report has raised concerns about a potential recession, leading to speculation about aggressive rate cuts by the Fed.
Market expectations currently suggest a 50% chance of a 50 basis points rate cut in September. The US Consumer Price Index (CPI) is projected to rise by 2.9% in July, while the core inflation is expected to slightly decrease to 3.2% year-on-year.
On the US Producer Price Index (PPI) front, annual figures are forecasted to show a 2.3% increase in July, with core PPI inflation expected to drop to 2.7%. These developments could push the Fed towards further easing measures, which may benefit the non-interest-bearing Gold price.
Geopolitical tensions in the Middle East, particularly between Iran and Israel, have also contributed to risk-off sentiment, driving investors towards safe-haven assets like Gold. The escalating conflict between the two nations could further impact Gold price movement in the near term.
Technical Analysis of Gold Price
On the daily chart, Gold price has shown signs of recovery but faced resistance near the $2,473 level. The 14-day Relative Strength Index (RSI) indicates a potential pullback, with support expected at the 21-day Simple Moving Average (SMA) around $2,421.
If the pullback continues, the next support levels are at $2,380 and $2,400. However, a breakout above $2,475 could lead to a test of the record high at $2,484, potentially reaching the $2,500 mark.
Conclusion and Analysis
The current market scenario suggests a cautious approach for Gold investors, with attention focused on upcoming US inflation data and geopolitical tensions in the Middle East. The Fed’s potential easing measures could support Gold prices, while any escalation in conflict between Iran and Israel may further drive demand for safe-haven assets.
Traders should monitor key resistance and support levels in Gold price, with a breakout above $2,475 signaling bullish momentum. Overall, staying informed about economic indicators and geopolitical developments is crucial for making informed investment decisions in the Gold market.