GOLD Analysis
Afternoon: Gold Prices Steady as Investors Await Key US Jobs Report
Highlights:
- Gold prices steady at $2,360 with 73% chance of Fed rate cuts in September; key US jobs report and geopolitical tensions in focus.
- Key data: German Industrial Production, Euro Zone Retail Sales, US Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate.
- Support at $2,340 and resistance at $2,380; strategy: buy on drop around $2,356, target $2,375, stop loss below $2,340.
Overview
Gold prices are firm around $2,360 and are anticipated to rise for the second consecutive week as investors await a critical US monthly jobs report, which may solidify Federal Reserve interest rate predictions for this year. Earlier this week, data revealed a surprising decrease in US services activity and weak private employment numbers, supporting a dovish outlook on Fed policy. Markets are already pricing in a 73% chance that the Fed will begin reducing rates in September. Additionally, rising geopolitical tensions in the Middle East, with Israel engaged on two fronts against Hamas and Hezbollah, have increased safe-haven demand for gold.
Key Influences on Gold Prices
- Inflation Data Anticipation: The annual Personal Consumption Expenditures (PCE) inflation rate, the Federal Reserve's preferred inflation indicator, is forecast to fall from 2.7% to 2.6%, while the core PCE is expected to decrease from 2.8% to 2.6%.
- US Economic Data: Recent data indicated that the US economy is losing momentum. Wholesale inventories fell short of expectations, the final GDP figure was significantly lower, and jobless claims rose to their highest level since late 2021, suggesting a weakening labor market.
Upcoming Economic Data Releases
- Euro Zone: German Industrial Production (month-over-month), Retail Sales (month-over-month).
- US Zone: Average Hourly Earnings (month-over-month), Non-Farm Employment Change, Unemployment Rate.
Technical Analysis and Trading Strategy
Support and Resistance Levels:
- Gold (Spot): Support at $2,340 and resistance at $2,380
- Gold MCX: Support at ₹71,800 and resistance at ₹72,800.
Action: Buy on a drop around $2,356, targeting $2,375, with a stop loss below $2,340.
Conclusion
Investors are keenly awaiting the US jobs report, which could influence the Fed's interest rate decisions. The dovish Fed outlook and geopolitical tensions continue to support gold prices. Traders should monitor support and resistance levels and consider buying on dips around $2,356, targeting $2,375, with a stop loss below $2,340.
Support and Resistance Levels:
