Gold Rose as US Treasury Yield Drop, Dollar Weakens

Fundamental Analysis

* Inflation Watch: Gold prices advanced during the Asian trading session as traders assessed the decline in U.S. Treasury yields while awaiting a key inflation report from the U.S. The U.S. Treasury bond yields fell with the yield on the 10-year Treasury fell by 5 basis points to 3.648%, while the 2-year Treasury yield dropped 6 basis points to 3.607%. Investors are now focused on August’s Consumer Price Index (CPI) release, expected on Wednesday, which may show a further decline from July’s 2.9% inflation rate. The data is anticipated to support the Federal Reserve’s dovish approach toward potential rate cuts amid concerns about a weakening labor market.

Technical Analysis

* Technical Breakout: Gold price was traded higher while currently testing the resistance level 2520.00. MACD which illustrate strong bullish momentum signal with formation of golden cross suggest the commodity to likely further extend its gains.

*Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 2550.00 after it breaches above the level 2520.00. Conversely, a potential reversal is also to be expected and the price could head back towards the level 2485.00.

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Potential Risks

Looking ahead, investors are now focusing on upcoming key U.S. inflation data, including CPI and PPI, to gain further insights into the potential direction of the Fed’s rate cut decisions.

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Monitoring

Stay updated on US data, 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.