On Thursday, Gold (XAU/USD) experienced a slight pullback during the European session as US yields rebounded and the US Dollar strengthened. This pullback comes as traders await key data releases and speeches at the Jackson Hole central banker symposium.
US Data Signals Potential Fall in Interest Rates, Supporting Gold
Weak US economic data has raised expectations of a possible decrease in US interest rates, which is generally positive for Gold. The release of the Fed’s July meeting minutes indicated a growing willingness among members to cut rates, with a 0.25% reduction in September seen as likely. The chances of a larger 0.5% cut have also increased, which could further boost Gold prices.
Additionally, revised Nonfarm Payrolls data showed a downward trend in job creation, putting further pressure on US yields and the Dollar, and supporting Gold’s upward movement.
Technical Analysis Points to Continued Upside for Gold
Despite the recent pullback, technical analysis suggests that Gold’s bullish trend remains intact. The breakout from a previous range has set an upside target of $2,550, indicating further potential gains for the precious metal.
XAU/USD Daily Chart
The overall outlook for Gold remains positive, with both medium and long-term trends supporting further price appreciation.
Upcoming Economic Indicator: S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI) is a key indicator of US private-business activity and can impact market sentiment. The latest data release is scheduled for Thursday and could provide further insights into the health of the US economy.
Analysis:
Gold’s recent pullback is driven by a rebound in US yields and Dollar strength, but the overall outlook remains positive. Expectations of a rate cut by the Fed and weak economic data continue to support Gold prices. Technical analysis also suggests further upside potential for Gold in the near term. Traders should keep an eye on upcoming data releases and speeches for potential market-moving events.