As the world’s best investment manager and financial market journalist, I bring you the latest updates on the gold price movement. The US Dollar is holding onto its weekly gains as Treasury yields remain flat and the mood in the market is upbeat. But the question on everyone’s mind is – will the gold price see an upside breakout to reach fresh record highs? The RSI indicator is still bullish, hinting at possible further gains.
Gold Price Looks to US PCE Inflation for Fresh Direction
The core PCE Price Index, which is the US Federal Reserve’s preferred measure of inflation, is set to be released soon. This data will play a crucial role in determining the Fed’s interest rate decisions beyond September. After the recent upward revision to the US second-quarter GDP data, market expectations of a significant rate cut in September have cooled off.
With the US economy growing at a solid pace last quarter, fueled by consumer spending and business investment, the likelihood of a 50 basis point cut next month has decreased. The US Dollar has rebounded in response to the positive GDP data, but gold buyers are not backing down as they continue to test record highs.
Geopolitical tensions between Russia and Ukraine, as well as simmering Israel-Iran tensions, are also supporting the demand for gold. Additionally, cooling inflation in Spain and Germany has raised expectations of a rate cut by the ECB in September, further boosting the gold price.
However, the gold price’s upward momentum has paused ahead of the US PCE inflation data release. Traders are waiting to see if the inflation numbers will impact the Fed’s decision on further easing measures.
Gold Price Technical Analysis: Daily Chart
With gold price consolidating this week, the US PCE inflation data could trigger a breakout. The symmetrical triangle breakout pattern suggests a potential upside move, supported by the RSI indicator. Gold buyers are in control as long as the price remains above key support levels.
The $2,500 threshold is the initial demand area for gold price, with further support at $2,470. On the upside, a daily close above $2,532 could lead to a challenge of the $2,550 level and beyond.
Analysis Breakdown:
In summary, the gold price is facing resistance near $2,530 as traders await the US core PCE inflation data. The outcome of this data release will influence the Fed’s interest rate decisions and could impact the future direction of the gold price. Geopolitical tensions and central bank policies are also playing a role in supporting the demand for gold. Traders should keep a close eye on the upcoming economic indicators and technical levels to gauge the potential movements in the gold price.