Gold prices are poised to mark their third consecutive week of gains, hovering above the $2,400 threshold on Friday. Market speculation surrounding the Federal Reserve’s potential easing cycle in September continues to support the precious metal’s upward trajectory.
Despite the US Department of Labor’s report showing higher-than-expected factory prices, the US dollar failed to gain momentum, allowing gold prices to maintain their footing. The XAU/USD pair is currently trading at $2,415, relatively unchanged.
| 07/12/2024 14:33:16 GMT
According to the US Bureau of Labor Statistics, the Producer Price Index (PPI) experienced a modest increase in June, surpassing analyst predictions. Meanwhile, the University of Michigan’s Consumer Sentiment preliminary reading for July indicated a decline, although inflation expectations have begun to stabilize.
As market participants closely monitor the Federal Reserve’s monetary policy decisions, gold prices are likely to remain sensitive to any changes in interest rate expectations. With the current momentum, gold is on track to extend its gains, solidifying its appeal as a safe-haven asset.
Gold prices are holding firm, supported by a strengthening likelihood of a September rate cut by the Federal Reserve. The CME FedWatch Tool indicates a 94% chance of a quarter-point rate reduction, boosting gold’s appeal as a non-yielding asset.
US Treasury bond yields are declining, with the 10-year note yielding 4.19%, supporting gold prices. Inflation concerns persist, with Fed officials cautious about monetary policy shifts. Chicago Fed President Goolsbee noted favorable inflation data, while St. Louis Fed President Musalem expects moderate economic growth.
The US Dollar Index (DXY) has dropped 0.40% to 104.09, also supporting gold prices. Recent US economic data showed higher-than-expected PPI and core PPI numbers, but inflation expectations have tempered.
Gold prices are consolidating above $2,400, with momentum favoring buyers. Technical analysis suggests a potential upside to $2,450 and $2,500, while support levels are at $2,392 and $2,350.
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