- At the start of this week’s trading, gold futures approached an all-time daily high as investors prepare for key US inflation data.
- Also, financial markets are monitoring geopolitical tensions in the Middle East as the US beefs up its military presence in the region.
- It could be another volatile week for the precious metal. According to gold trading platforms, gold prices rose to the resistance level of $2,476 per ounce.
- Gold is coming off a weekly gain of 2%, adding to its rise since the beginning of the year of more than 21%.
In the same performance, silver prices, gold’s sister commodity, rose above $28 per ounce. Also, the price of white metal rose by 2% last week and has been up 17% since the beginning of the year.
This week, two major US inflation reports will be released: the Consumer Price Index and the Producer Price Index. According to the economic calendar, producer prices are expected to change little in July. The annual consumer price inflation rate is expected to fall to 3.2%. Furthermore, the July retail sales report and more manufacturing data will also capture investors' attention.
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Concurrently, these statistics will prove vital for financial markets as they could signal the Fed’s stance in September. Meanwhile, the futures market is widely expecting a rate cut, traders are debating whether the US central bank will cut its benchmark rate by 25 basis points or 50 basis points. For the moment, tensions in the Middle East are fueling safe-haven demand. Israeli forces have stepped up operations in Gaza, while Iran has threatened to retaliate for the assassination of a Hamas leader on its soil.
Overall, gold is bullish. Commenting on the market performance, TD Securities said in a note: “From any angle you look at it, gold now looks like a populated trade. The Street is unanimously bullish, but the macro fund situation may be exhausted now without an imminent recession.”
Also, gold prices found support from a weaker dollar and lower Treasury yields. The US Dollar Index (DXY), a measure of the greenback against a basket of major currencies, was flat at 103.12. US Treasury yields were in the red across the board, with the 10-year note yield holding steady at below 3.91%. The 2-year note yield fell below 4.02%, while the 30-year note yield slipped below 4.2%.
Gold Price Forecast and Analysis Today:
The overall bullish trend in gold is strengthening and the path is now paved for a move towards a new all-time high of $2,500 per ounce. From there, all technical indicators will move towards strong overbought levels. Technically, there will be no profit-taking that will turn bearish without a cessation of global geopolitical tensions and a recovery in the US dollar. Ultimately, we still prefer to buy gold from every low until the above happens.
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