GOLD Analysis
Afternoon: Gold Surges Beyond $2,360 Amid Fed Rate Cut Expectations
Highlights:
- Gold prices rise beyond $2,360 with 77% chance of September rate cut; focus on Powell's testimony and upcoming inflation data.
- Key economic data: NFIB Small Business Index, Fed Chair Powell's Testimony; support at $2,345, resistance at $2,385.
- Trading strategy: Sell on jump around $2,370, target $2,350, stop loss above $2,382.
Overview
Gold prices have surged past $2,360, recouping some losses from the previous session as investors turn their attention to Fed Chair Powell's semi-annual address to Congress. Last week's data indicated a weakening labor market in the US, with unemployment reaching a two-and-a-half-year high and wage growth falling to a three-year low, suggesting that the Federal Reserve may soon cut interest rates. Markets are currently pricing in a 77% chance of a rate cut in September, with another cut expected in December. Powell's testimony before the Senate today and the House on Wednesday will provide clearer signals about the Fed's future interest rate path. Investors are also awaiting significant inflation numbers to be released on Thursday and are monitoring geopolitical developments in the Middle East, where a ceasefire between Israel and Hamas is anticipated.
Key Economic Data to Watch
- US Zone: NFIB Small Business Index, Fed Chair Powell's Testimony.
Technical Analysis and Trading Strategy
- Support and Resistance Levels:
- Gold (Spot): Support at $2,345 and resistance at $2,385.
- Gold MCX: Support at ₹71,850 and resistance at ₹72,750.
- Action: Sell on a jump around $2,370, targeting $2,350, with a stop loss above $2,382.
Conclusion
Investors are keenly observing Powell's testimony and upcoming inflation data, which are expected to influence the Fed's policy decisions and, consequently, gold prices. Additionally, geopolitical tensions and potential ceasefire agreements in the Middle East may impact market sentiment.
Support and Resistance Levels:
