GOLD Analysis
Afternoon: Gold Prices Rise Amid Lower Treasury Yields and Anticipation of Key US Data
Highlights:
- Gold surged to $2,665 as falling U.S. Treasury yields boosted demand.
- Market pricing indicates a 90% chance of a 25-basis-point Fed rate cut in November.
- Upcoming U.S. economic data, including retail sales and unemployment claims, could influence gold's momentum.
Overview:
Gold prices surged to $2,665, driven by a decline in U.S. Treasury yields and a modest fall in the U.S. dollar, as market participants await pivotal economic data for further insight into the Federal Reserve's policy trajectory. A drop in 10-year Treasury yields, triggered by weaker-than-expected manufacturing data from New York, spurred increased interest in non-yielding assets like gold. Although the dollar fell by 0.2%, it stayed near its recent highs, limiting the full upward potential for gold.
The current market sentiment, as reflected by CME’s FedWatch tool, suggests a 90% likelihood of a 25-basis-point interest rate cut in November, adding further bullish sentiment to gold prices. With upcoming U.S. retail sales, industrial production, and unemployment claims data on the horizon, investors are closely monitoring these reports to assess future monetary policy decisions. While gold continues to benefit from its safe-haven appeal amid global economic uncertainty, the easing of tensions in the Middle East may temper some of its upward momentum.
Economic Outlook and Data Expectations
The key upcoming releases, including CPI y/y and Core CPI y/y from the GBP zone, along with Import Prices m/m from the U.S., are expected to provide further clarity on inflation trends and economic health.
Technical Overview
- Gold$ Support: $2,642 | Gold$ Resistance: $2,688
- Gold MCX Support: ₹75,900 | Gold MCX Resistance: ₹76,800
Suggested Action:
- Traders are advised to sell around $2,675-77, targeting $2,652, with a stop loss above $2,688.
Conclusion
Gold remains in a delicate balance between bullish drivers like falling Treasury yields and uncertainties over the Fed's rate cuts, with geopolitical tensions also playing a secondary but significant role. Investors should continue to monitor U.S. economic reports and developments closely, as they could trigger further shifts in gold’s price trajectory.
Support and Resistance Levels:
