GOLD Analysis
Afternoon: Gold Prices Remain Steady as Market Awaits US Inflation Report and Fed Rate Decision
Highlights:
- Gold prices remain steady at $2,520 as markets await the US inflation report for clues on Fed rate cuts.
- Mixed jobs data creates uncertainty, with inflation expected to slow to 2.6% annually in August.
- Markets predict a 67% chance of a 25 bps rate cut and 33% for a 50 bps reduction at the Fed's next meeting.
Overview:
Gold prices hovered around $2,520 per ounce as investors awaited this week's US inflation report, which is expected to offer vital insights into the Federal Reserve’s next move on interest rates. Last week’s mixed jobs report added to market uncertainty, with fewer-than-expected job gains but a decline in the unemployment rate, leaving the path of future rate cuts less clear. Market sentiment is now focused on inflation data, which will likely determine the size of the upcoming rate cut by the Fed.
Forecasts suggest US inflation will slow to 2.6% annually in August, down from 2.9% in July, while the monthly inflation rate is expected to remain steady at 0.2%. These figures will play a critical role in shaping the Fed’s rate decision next week. According to the CME FedWatch tool, markets are pricing in a 67% probability of a 25 basis point cut, with a 33% chance of a more significant 50 basis point cut.
Technical Outlook
Support and Resistance: Gold prices are finding support at $2,492 with resistance at $2,548. In the Indian market, Gold MCX prices are supported at ₹71,600 and face resistance at ₹72,350.
Actionable Strategy
Buy on Dip: Investors may consider buying gold if prices drop around $2,512, with a target of $2,532. Implement a stop loss below $2,500 for risk management.
The upcoming US Core CPI and CPI data will further guide market participants on inflation trends, influencing gold price movements and the Fed's monetary policy trajectory.
Support and Resistance Levels:
