GOLD Analysis
Afternoon: Rebound Amid Positive Economic Indicators and Anticipation of PCE Report
Highlights:
- US GDP growth surpassed expectations, increasing at an annualized rate of 2.8% in Q2.
- Market fully expects a Federal Reserve rate cut in September, with two more cuts anticipated by year-end.
- Gold prices recovered to $2,375, driven by positive economic data and anticipation of the PCE inflation report.
Overview:
Gold prices have rebounded to approximately $2,375, recovering from a significant drop in the previous session. This recovery comes as investors digest better-than-expected US economic data and look ahead to the upcoming PCE inflation report. The US GDP increased at an annualized rate of 2.8% in the second quarter, surpassing market expectations of 2% and accelerating from 1.4% growth in the previous period. Despite the strong GDP figures, market expectations for Federal Reserve rate cuts remain unchanged, with a decrease anticipated at the September meeting and two more cuts forecasted by the end of the year.
Key Economic Data:
- Spanish Unemployment Rate (Euro Zone)
- Core PCE Price Index (US)
- Revised University of Michigan Consumer Sentiment (US)
- Revised University of Michigan Inflation Expectations (US)
Technical Levels:
- Gold (USD) Support: $2,352
- Gold (USD) Resistance: $2,400
- Gold (MCX) Support: ₹67,100
- Gold (MCX) Resistance: ₹67,800
Technical Analysis:
The gold market has shown resilience amid strong US GDP data, temporarily boosting the US dollar and typically exerting downward pressure on gold prices. However, the anticipation of further Federal Reserve rate cuts and ongoing economic uncertainties have helped gold prices recover.
Strategic Action Plan:
Buy on Drop Around: $2,385, targeting $2,400, with a stop loss below $2,367
Market Insights:
- US GDP Growth: The US economy grew at an annualized rate of 2.8% in Q2, exceeding expectations and indicating robust economic activity.
- Federal Reserve Rate Cuts: Despite strong GDP figures, the market fully expects a Federal Reserve rate cut in September, with further cuts anticipated by year-end.
Conclusion:
Gold prices are poised for potential growth amid mixed economic signals and anticipated monetary policy actions. The market's focus will remain on upcoming economic data releases and Federal Reserve communications, providing strategic investment opportunities in the gold market.
Support and Resistance Levels:
