Gold price remains steady above the $2,500 mark as it trades close to the all-time peak reached earlier this week. The positive risk tone in the market is limiting the upside, but various factors are providing support to the precious metal. The weak US job growth data released on Wednesday and the dovish outlook from the Federal Reserve regarding interest rate cuts have been driving forces behind the recent price movements.
Investors are now eagerly awaiting Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium for further clarity on the potential interest rate cuts in September. The ongoing risk-on sentiment is keeping a lid on the safe-haven appeal of gold, although geopolitical tensions, such as the lack of progress in a truce agreement between Israel and Hamas, are helping to limit the downside.
Market Movers: Gold Price Undermined by Upbeat Market Mood, Fed’s Dovish Outlook to Limit Downside
- The US Dollar hit a year-to-date low on Wednesday following weaker-than-expected labor market data, leading to a rebound in the Gold price from sub-$2,500 levels.
- Recent employment data revisions by the US Bureau of Labor Statistics revealed a significant decrease in reported job additions over the past year.
- The July FOMC meeting minutes indicated strong support for a rate cut in September, increasing market expectations for easing measures.
- Market probabilities now suggest a potential 50 basis points rate cut next month, contributing to the bullish sentiment for gold.
- Geopolitical uncertainties, such as the ongoing tensions between Israel and Hamas, are also supporting the safe-haven appeal of gold.
- Traders are looking to upcoming US economic data releases for short-term trading opportunities, with a focus on Jerome Powell’s speech on Friday.
Technical Analysis: Gold Price Primed for Further Upside, Key Support Levels Identified
Technically, gold is in a bullish consolidation phase, with positive oscillators on the daily chart supporting a near-term uptrend. A retest of the all-time peak around $2,531-2,532 is likely, with a break above signaling further upside potential. On the downside, support near $2,500 is expected to attract buyers, with $2,480 serving as a critical level for bullish momentum.
Overall, the current market dynamics, including Fed policy expectations, geopolitical tensions, and technical indicators, suggest a positive outlook for the Gold price in the near term. Traders should monitor key levels and upcoming events for potential trading opportunities.