Gold Consolidates As Focus Shifts To PCE

Fundamental Analysis

* Golden Pause: Gold prices (XAU/USD) are hovering near two-week lows, trading around the $2300 mark, as the Fed’s hawkish stance and higher US bond yields have created a headwind for the yellow metal. At the end of the June meeting, the Federal Reserve adopted a more hawkish approach, with policymakers advocating for just one interest rate cut by the end of this year. While the Fed forecasted only one rate cut in 2024, markets are still anticipating a higher likelihood of the first cut in September and approximately two 25 basis point cuts by year-end. Currently, the market is hesitant to place aggressive bets, awaiting further key US macroeconomic data.

Technical Analysis

* Technical Breakout: Gold prices remain trading within a range of 2367.00 to 2294.00. However, the MACD indicator, showing bearish momentum with the formation of a death cross, suggests that the commodity price to decline in short term.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 2294.00. Conversely, a potential correction is also to be expected and the price could head towards 2367.00.

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

Potential Risks

Moving ahead, the market will closely watch the key data release of the US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure, on Friday. Additionally, investors will be keeping an eye on developments in the U.S. election, which could also potentially impact the financial markets.

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Monitoring

Stay updated on US data, US election, 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.