GOLD Analyis
Afternoon: Gold Market Steady Amid Economic Data and Rate Speculations
Highlights:
- US retail sales increased by 1.0% last month, indicating strong consumer spending and boosting economic outlook.
- US unemployment claims fell to a one-month low, reducing expectations for a 50 basis-point rate cut by the Federal Reserve.
- Key economic data to watch includes Trade Balance from the Euro Zone, and Building Permits, Prelim UoM Consumer Sentiment, and Prelim UoM Inflation Expectations from the US Zone.
Overview:
Gold prices held steady as robust US economic data alleviated recession fears and reduced expectations for an aggressive interest rate cut by the Federal Reserve next month. The Commerce Department's Census Bureau reported a 1.0% increase in retail sales last month, following a revised 0.2% decline in June. Additionally, US unemployment claims fell to a one-month low last week, indicating a persistent labor market downturn and tempering market expectations for a 50 basis-point rate decrease by the Federal Reserve in September. While markets are fully priced in for a rate cut next month, there remains uncertainty over whether it will be 25 or 50 basis points.
Economic Overview:
The US economy showed resilience with strong retail sales and declining unemployment claims, which has influenced the Federal Reserve's rate cut expectations. Retail sales data indicated consumer spending is on the rise, contributing to the improved economic outlook. The decrease in unemployment claims further supports the notion that the labor market remains robust, despite previous concerns.
Market Dynamics:
These economic indicators have led to a shift in market sentiment, with traders reassessing the likelihood and magnitude of a rate cut by the Federal Reserve. Although a rate cut is anticipated, the debate continues over whether it will be a modest 25 basis points or a more significant 50 basis points. This uncertainty has kept gold prices stable, as investors weigh the potential impacts of these economic developments on the precious metal's market.
Key Economic Data:
Upcoming key economic data includes the Trade Balance from the Euro Zone and Building Permits, Prelim UoM Consumer Sentiment, and Prelim UoM Inflation Expectations from the US Zone. These indicators will provide further insights into the economic health of major markets and could influence future monetary policy decisions.
Technical Levels:
- Gold$ prices are expected to find support at 2428$ and face resistance at 2490$.
- Gold MCX prices are anticipated to find support at 69700 and resistance at 70500.
Market Strategy:
Action: Buy till 2452 for targeting 2473 which invalidates below 2435
Conclusion:
The gold market remains in a holding pattern as traders await further economic data and clarity on the Federal Reserve's policy direction. Strong US economic indicators have provided support for the metal, but the ongoing uncertainty over interest rate cuts continues to play a crucial role in shaping market sentiment. Investors should closely monitor upcoming economic releases and central bank announcements for cues on future market movements.
Support and Resistance Levels:
