Gold Soars Amid Rising Expectation of Central Bank Rate Cuts

Fundamental Analysis

* Gleaming Gold: Gold prices are continuing to rise against the US dollar as expectations grow that global major central banks, including the Federal Reserve, may ease monetary policy in 2024. A recent consumer inflation report in the United States, which came in lower than expected, has led to speculation that the Fed could lower borrowing costs as soon as September. Data from the CME FedWatch Tool indicates a 76% chance of a 25-basis point rate cut by the Fed in September. Investors are now forecasting two rate cuts by the end of the year, which could bring the fed funds rate down to 4.75%-5.00%.

Technical Analysis

* Technical Breakout: Gold price was traded higher following prior rebound from its recent low. MACD which illustrate diminishing bearish momentum signal suggest the commodity to further extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 2454.00. Conversely, a potential trend retracement is also to be expected and the price could head back towards 2400.50.

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

Potential Risks

Moving forward, the market will focus on the Federal Reserve as Fed speakers will dominate the US economic docket during the week leading up to the release of the latest Fed meeting minutes on Wednesday. Additionally, the market will also focus on the US Initial Jobless Claims data as it is expected to indicate a cooling labor market, along with the Chicago Fed National Activity Index.

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Monitoring

Stay updated on US data, Fed 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.