Gold Soars Amid Dovish Comments From Fed

Fundamental Analysis

* Dovish Fed: Gold prices have surged, reclaiming the $2,500 level after dovish remarks from the Fed signaled an upcoming interest rate cut starting in September, coupled with a weaker dollar. Fed Chair Jerome Powell delivered the message at the Kansas City Fed’s annual economic symposium in Jackson Hole on Friday, leading to broad pressure on the USD. Powell stated that “the time has come” for the central bank to begin reducing interest rates, citing recent labor market softness. He also emphasized that the Fed does not “seek or welcome further cooling in labor market conditions.” Markets have now fully priced in a 25 basis point rate cut, with the probability of a deeper cut rising to 36.5%, up from 24% last week, according to the CME FedWatch Tool. Expectations of further monetary easing by the Fed could continue to boost gold’s appeal for holders of other currencies.

Technical Analysis

* Technical Breakout: Gold price was traded higher while currently testing the resistance level 2517.00. MACD which illustrate bullish momentum signal suggest the commodity  to extend its gains after it breaks above the level.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 2550.00 after it breach above the level. Conversely, a potential reversal is also to be expected and the price could head back towards 2482.00.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, investors will focus on key U.S. data this week, including the CB Consumer Confidence report, GDP figures, and the Core PCE Price Index. Additionally, the market will keep a close eye on developments in the Middle East, as ongoing political tensions are expected to sustain demand for safe-haven assets.

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Monitoring

Stay updated on US data, Middle East developments, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.