GOLD Analysis
Afternoon: Gold Prices Rise Amid Falling Dollar and Fed Rate Cut Speculation
Highlights:
- Gold prices rise as US dollar falls, with investors focusing on Fed minutes for rate cut signals and a 67% chance of a September cut.
- Key economic data to watch: ADP Non-Farm Employment Change, Unemployment Claims, ISM Services PMI, FOMC Meeting Minutes.
- Support at $2,300 and resistance at $2,350; suggested strategy: buy on drop around $2,322, target $2,345, stop loss above $2,308.
Overview
Gold prices rose as the US dollar fell, with investors keenly awaiting the minutes from the Federal Reserve's most recent policy meeting for further signals on the timing of potential interest rate cuts. Fed Chair Jerome Powell indicated that the US is back on a "disinflationary path," but emphasized the need for more data before decreasing interest rates to ensure that recent lower inflation readings are an accurate reflection of the economy. Meanwhile, US job postings increased in May after a sharp decline in the previous two months, although the trend still points to an easing of labor market conditions. According to the CME FedWatch Tool, traders are currently pricing in a 67% chance of the Fed cutting interest rates in September.
Key Influences on Gold Prices
- US Zone: ADP Non-Farm Employment Change, Unemployment Claims, ISM Services PMI, and FOMC Meeting Minutes.Upcoming Economic Data Releases
Technical Analysis and Trading Strategy
Support and Resistance Levels:
- Gold (Spot): Support at $2,300 and resistance at $2,356
- Gold MCX: Support at ₹71,100 and resistance at ₹72,000.
Action: Buy on a drop around $2,335, targeting $2,356, with a stop loss below $2,325.
Conclusion
Investors are optimistic about the potential for interest rate cuts, given the mixed signals from economic data and the Fed's cautious stance on inflation. As traders await crucial economic reports and Fed meeting minutes, gold prices are likely to remain influenced by these developments.
Support and Resistance Levels:
