Gold Prices Surge Despite Strong US Economic Data
Gold prices continued to climb despite positive US economic indicators, including an upward revision of Q2 GDP and a decrease in unemployment claims. The rise in US Treasury yields and the strengthening of the US Dollar did not deter the upward trend in Gold prices, which reached $2,523 in late North American trading.
Market focus has now shifted to the upcoming core PCE data, which is expected to show a slight increase and could influence the Federal Reserve’s decisions on interest rates. The CME FedWatch Tool indicates a 65.5% likelihood of a 25 bps rate cut in September, further supporting Gold prices.
Analysis and Breakdown
The resilience of Gold prices in the face of strong US economic data highlights the market’s anticipation of a potential rate cut by the Federal Reserve. Despite the positive GDP figures and lower unemployment claims, investors are betting on a rate cut in September, driving Gold prices higher.
The upcoming core PCE data will be crucial in determining the Fed’s next move, with expectations of a slight increase in inflation. If the data confirms these expectations, it could further bolster Gold prices. Traders are closely monitoring the Fed’s actions, with the possibility of a larger rate cut fueling speculation in the market.
From a technical perspective, Gold prices are on an upward trajectory, with resistance levels at $2,550 and $2,600. If the current trend continues, we could see further gains in the precious metal. On the other hand, a dip below $2,500 could signal a shift in sentiment, with key support levels at $2,483 and $2,450.