Gold Prices Rebound Amid Mixed Signals from US Economic Data
Gold prices surged to $2,644.00 per troy ounce on Friday as investors analyzed conflicting reports on the US economy. September’s strong job market raised doubts about the Federal Reserve’s plan for monetary easing, with some suggesting a more cautious approach to interest rate cuts.
Inflation reports added to the uncertainty, with the consumer price index slowing less than expected and core inflation rising. These mixed signals have complicated the outlook for US monetary policy, leading to revised expectations among market participants.
Initially, there was speculation of a 50-basis-point rate cut, but now a more conservative 25-basis-point cut is seen as more likely at the Fed’s November meeting, with an 86% probability according to market forecasts. For gold, which doesn’t pay interest, the prospect of easing by the Federal Open Market Committee remains a positive factor, especially in a low interest rate environment.
Despite the recent uptick, gold is set for its second consecutive weekly decline. However, technical analysis suggests a potential continuation towards $2,676.50, followed by a correction to $2,645.00. The bullish scenario is supported by the MACD indicator, indicating strengthening momentum.
On the hourly chart, gold has broken upwards from a consolidation range above $2,605.00, nearing the target of $2,644.00. A narrow consolidation range may form today, with a possible corrective move to $2,625.00 before another rise to $2,662.00. The forecast is backed by the Stochastic oscillator, suggesting a short-term pullback before further gains.
In conclusion, the mixed economic data and inflation reports have created uncertainty in the gold market, with investors closely watching the Fed’s upcoming decision on interest rates. Technical analysis indicates a potential uptrend in gold prices, but short-term corrections are possible. It’s important for investors to stay informed and adapt their strategies accordingly to navigate the current market conditions.