Gold Eyes Support at 2368
In gold the first support is at 2368, with subsequent levels at 2345 and 2320 below that. Above, the initial resistance is at 2395, followed by 2405 and 2430 if this level is surpassed.
US Inflation Data Boosts Gold Prices, Traders Eye Fed Rate Cut
On Friday, gold dipped below $2,410 per ounce after a nearly 2% increase in the previous session but remains poised for its third consecutive weekly gain. Softer-than-expected US inflation figures, with headline inflation easing to a one-year low of 3% in June and annual core inflation dropping to a three-year low of 3.3%, boosted expectations for a Federal Reserve interest rate cut. Traders now see a 93% probability of a September rate cut, up from 73% earlier in the week. San Francisco Fed President Mary Daly supports rate cuts, while Chicago Fed President Austan Goolsbee remains optimistic about achieving 2% inflation.
The dollar index hovered around 104.5 on Friday, poised for a second weekly decline, as subdued US inflation and recent Fed statements solidified expectations of a September rate cut. The index dropped sharply to 104.08 on Thursday after reports showed US annual inflation fell to 3% in June, a one-year low, missing expectations of 3.1%. Market sentiment now reflects over a 90% probability of a September rate cut, up from around 70% earlier in the week. Investors await US producer inflation data for further insights. The dollar faced pressure from a strengthening yen amidst suspected Japanese intervention.
The Japanese yen hovered around 159 per dollar on Friday, showing volatility after a significant rebound in the previous session due to suspected intervention amidst cooler-than-expected US inflation data. The yen surged by 2.6% to 157.42 per dollar on Thursday, reportedly spurred by official purchases to support the currency after it fell to 38-year lows. Reports indicated that the Bank of Japan (BOJ) conducted rate checks with banks on the euro-yen cross, raising concerns of additional intervention. Senior currency diplomat Masato Kanda declined to confirm government involvement in the yen’s rally. Investors focus on the BOJ’s late July policy meeting, expecting plans for tapering bond purchases and potentially raising interest rates.
EUR/USD Faces Initial Resistance at 1.0865
In the EUR/USD pair, the initial resistance will be at 1.0865, followed by 1.0900 and 1.0950 if this level is surpassed. On the downside, the first support is at 1.0850, with subsequent supports at 1.0810 and 1.0780 below that.
Gold Testing Key Support at 2395
In gold the first support is at 2395, with subsequent levels at 2365 and 2340 below that. Above, the initial resistance is at 2405, followed by 2430 and 2470 if this level is surpassed.
Market Outlook: Gold Soars to $2,430 with Fed Rate Cuts Nearly Priced In
Gold surged to approximately $2,430 an ounce on Tuesday, nearing new all-time highs. This follows Fed Chair Powell’s comments that strengthened expectations for imminent interest rate cuts. Powell noted that recent data “add somewhat to confidence” that inflation is moving toward the target. Investors are focused on US retail sales data and further Fed comments for guidance on monetary policy. Markets have nearly fully priced in a September rate cut, with two more reductions expected by year-end. However, gold could face pressure from a rising dollar and increasing Treasury yields.
The New Zealand dollar fell to around $0.605, nearing a two-week low, as investors await Q2 inflation data. Economists forecast consumer inflation slowed to 3.5% from 4%, the lowest in three years. The RBNZ maintained the cash rate at 5.5% last week but suggested policy could become less restrictive if inflation continues to decline, increasing the likelihood of an August rate cut. The Kiwi also faced pressure from a slight rise in the US dollar.
The dollar index rose above 104.3 on Tuesday, marking its second consecutive session of gains. Powell’s comments that inflation is moving toward the target and the Fed won’t wait for 2% before cutting rates boosted the dollar. Markets have nearly fully priced in a September rate cut, with two more expected by year-end. The dollar also received safe-haven demand after a failed assassination attempt on former President Trump. The dollar appreciated against all major currencies, with the most significant gains against the Kiwi and yen.
EUR/USD Eyes Resistance at 1.0895 and Beyond
If the EUR/USD pair cannot hold above 1.0900, the first resistance level will be 1.0895. If it maintains above this level, the next resistances to watch will be 1.0920 and 1.0950. On the downside, the first support is at 1.0870, and if this level is broken, the next supports to monitor will be 1.0830 and the 200-day moving average at 1.0800.
Pound Extends Gains: Eyeing Resistance at 1.3000
With the stronger-than-expected growth data, the pound continues its upward trend, with the first resistance level at 1.3000. If this level is breached and maintained, the next resistance levels to watch will be 1.3085 and 1.3150. On the downside, the first support is at 1.2920, and if this level is broken, the next supports to monitor are 1.2860 and 1.2820.
Yen Stabilizes, Dollar Under Pressure, and Gold Hits Record High
The Japanese yen stabilized around 158.4, remaining close to its strongest levels in a month with concerns that authorities might intervene again to support the currency. Last week, the yen gained about 2% following the US inflation data, with Bank of Japan reports indicating that the government may have spent nearly 6 trillion yen on interventions on Thursday and Friday. On the monetary policy front, the BoJ is expected to announce plans to taper bond purchases and potentially raise interest rates at its upcoming meeting later this month. Additionally, the Reuters Tankan survey revealed that business sentiment among large manufacturers in Japan improved to a seven-month high in July, although confidence among non-manufacturers declined due to an uncertain economic outlook.
The dollar index remained around 104.2 on Wednesday, close to its lowest levels since April, pressured by expectations that the Federal Reserve may start cutting rates as early as September. On Tuesday, data revealed that US retail sales were unchanged in June, with a decline in auto sales balanced by increased activity in other sectors. Earlier this week, Fed Chair Jerome Powell noted that recent data “add somewhat to confidence” that inflation is on track to return to target and emphasized that the central bank won’t wait until inflation hits 2% to cut rates. Fed’s Beige Book on Wednesday, as well as housing starts and building permits data for June are awaited. The markets are almost certain that the Fed will implement a quarter-point rate cut in September, with two more reductions anticipated by the year’s end. Additionally, the dollar has found some support from what analysts are calling the “Trump Trade” following a failed assassination attempt on the US presidential candidate.
Gold surged above $2,470 per ounce on Wednesday, hitting a new record high. Fed Chair Jerome Powell indicated on Monday that June’s low inflation increased confidence in achieving the price growth target and stated that the central bank will not wait for inflation to reach 2% before initiating rate cuts. This sentiment was supported by Fed Governor Adriana Kugler on Tuesday, who expressed cautious optimism about inflation moving toward the target rate. Markets are fully expecting a rate cut at the Fed’s September meeting, with CME’s FedWatch Tool indicating traders are leaning toward three 25 basis point cuts rather than two this year. Additionally, expectations that other major central banks in Europe and Asia will also implement rate cuts have increased demand for precious metals in those regions.
EUR/USD: Resistance at 1.0920 and Support at 1.0890
The first resistance level for the pair is 1.0920, and if this level is breached, the next levels to watch will be 1.0950 and 1.1000. On the downside, the first support is at 1.0890, and if this level is broken, the next support to monitor will be 1.0860 and 1.0830.
Gold Rises with Resistance at 2,482
Gold started the day upward, with the first resistance level at 2,482. If this level is surpassed, the next targets will be 2,500 and 2,520. On the downside, the first support is at 2,460, and if this level is broken, the next supports to watch will be 2,445 and 2,430.
Market Outlook: Fed Officials Reinforce Rate Cut Confidence, Boosting Market Optimism
Gold remained steady near $2,460 per ounce on Thursday, close to record highs amid optimism for a Fed rate cut in September. Fed Governor Waller and Fed Chair Powell reinforced confidence in an imminent rate cut, citing June’s lower-than-expected inflation. Markets show a 98% chance of a September rate cut, with expectations for three 25 basis point cuts this year, according to CME’s FedWatch Tool.
The dollar index remained around 103.7 on Thursday, near a four-month low as traders bet on multiple Fed rate cuts this year. Dovish comments from Fed officials, including Powell, increased confidence in rate cuts before inflation hits 2%. Markets expect over 60 basis points of reductions this year. Investors are focused on US jobless claims data and the European Central Bank’s policy decision.
The Australian dollar steadied around $0.673, halting its decline after stronger-than-expected June job figures, despite a rise in the unemployment rate to 4.1%. The Reserve Bank of Australia is expected to maintain rates in August, but inflationary pressures and a tight labor market could prompt another hike. The Aussie gained support from a weaker US dollar amid Fed rate cut expectations.
USD/JPY Eyes Resistance at 156.90 Amidst Strong Uptrend
Since breaking the rising channel from around 140.00, the first support level for USD/JPY will be 155.60. If this level is breached and maintained below, the next supports to watch will be 154.80 and 153.90. On the upside, the first resistance is at 156.90, and if this level is surpassed, the next targets will be 157.30 and 158.00.
Gold’s Upward Movement Faces First Support at $2,460
Gold started the day with an upward movement, with the first resistance level at 2,482. If this level is surpassed, the next targets will be 2,500 and 2,520. On the downside, the first support is at 2,460, and if this level is broken, the next supports to watch will be 2,445 and 2,430.
Markets Anticipate Multiple Fed Rate Cuts, Boosting Gold Prices
Gold edged down to around $2,420 per ounce on Friday as the dollar strengthened on robust US economic data. Despite this, expectations for Fed rate cuts remained unchanged, with markets implying a 98% probability of a September rate cut. The dollar gained from better-than-expected manufacturing growth in the US Mid-Atlantic region, while an increase in weekly jobless claims was attributed to seasonal factors. Gold is still poised for its fourth consecutive weekly gain.
The Japanese yen stabilized around 157.3 per dollar after June’s headline inflation held steady at 2.8% and core inflation rose to 2.6%. This uptick reinforced expectations that the Bank of Japan might consider raising rates at its meeting on July 30-31. Despite suspected government intervention pushing the yen to a 38-year low earlier in July, the yen is set for its second consecutive week of gains, up about 3%.
On Friday, the dollar index stayed above 104.2, recovering from a four-month low with support from strong US economic indicators. July’s manufacturing activity in the Mid-Atlantic region surpassed expectations, driven by a rise in new orders. Despite higher-than-expected weekly jobless claims, sentiment on the labor market remained steady. ECB kept rates unchanged, with President Christine Lagarde indicating uncertainty for September. The dollar also strengthened against the New Zealand dollar amidst dovish sentiments in New Zealand.
EUR/USD Profit-Taking After ECB Holds Rates Steady
The pair faced some profit-taking after the ECB kept rates unchanged and recent inflation data met expectations. The first support level is seen at 1.0865, with further levels below at 1.0810 and 1.0780. On the upside, the initial resistance is at 1.0900, followed by 1.0950 and 1.1000 if the pair moves above these levels.
Gold Starts Downward, Tests Resistance at 2,430
Gold started the day with a downward movement, with the first resistance level at 2,430. If this level is surpassed, the next targets will be 2,475 and 2,500. On the downside, the first support is at 2,415, and if this level is broken, the next supports to watch will be 2,390 and 2,355.
Gold Rebounds to $2,410 on Weaker Dollar; Australian Dollar Hits Three-Week Low
Gold climbed to around $2,410 per ounce on Monday, driven by a technical rebound after a nearly 2% decline in the previous session and bolstered by a weaker dollar. Last week, the precious metal faced downward pressure as the dollar strengthened on powerful manufacturing growth in the US Mid-Atlantic region in July, while an increase in weekly jobless claims was attributed to seasonal factors. Key indicators include the Q2 advance estimate for GDP growth, personal spending, income, and the June PCE price index. After President Joe Biden ended his reelection campaign, eyes turned to Vice President Kamala Harris.
The Australian dollar fell below $0.668, hitting its lowest level in three weeks as plummeting energy and metals prices put pressure on the currency. Given Australia’s heavy reliance on commodity exports, movements in commodity prices significantly impact the currency. The currency also faced downward pressure from a rebounding US dollar, despite ongoing expectations for potential rate cuts by the Federal Reserve. In contrast, the Australian dollar had outperformed its counterparts in early July on speculation that the central bank might raise rates again in August following a strong inflation report for May. June witnessed strong job additions in Australia, signaling tight labor market conditions, although the unemployment rate ticked up slightly to 4.1% from 4%. Currently, markets are pricing in approximately a 20% probability of a rate hike by the central bank in August.
On Monday, the dollar index stabilized around 104.4, strengthened by news of President Joe Biden’s decision to withdraw from the reelection race and endorse Vice President Kamala Harris as the Democratic nominee. Analysts indicated that Biden’s exit is expected to have minimal impact on markets, with former President Donald Trump remaining the frontrunner for November’s election. Last week, the dollar edged higher supported by robust US economic data. Despite this, the index has declined approximately 1.5% thus far in July, driven by easing inflation expectations reinforcing anticipations for a Federal Reserve interest rate cut in September. Speculation also persists about further cuts before year-end.
EUR/USD Begins Week Positively: Resistance at 1.0900
The EUR/USD pair started the week on a high note, with the first resistance at 1.0900. Above this level, the next resistances to observe are 1.0950 and 1.1000. On the downside, the initial support is at 1.0875, followed by 1.0845 and 1.0810 if it breaks below.
Gold Trades Sideways: Resistance at 2,430
Gold started the week with a sideways movement, with the first resistance level at 2,430. If this level is surpassed, the next targets will be 2,475 and 2,500. On the downside, the first support is at 2,395, and if this level is broken, the next supports to watch will be 2,385 and 2,355.
Financial Markets Hold Steady Awaiting Fed Guidance and Economic Data
Gold steadied around $2,400 per ounce on Tuesday after a four-session decline, with traders watching upcoming US economic data to gauge the Fed’s stance on interest rates. Key indicators include the Q2 GDP estimate, personal spending and income figures, and the June PCE price index. Recent reports showing a drop in US headline inflation to 3% and core inflation to 3.3% have strengthened expectations for Fed rate cuts starting in September, now priced at 94%. Investors are also analyzing President Biden’s decision to end his reelection campaign and endorse Vice President Harris.
The Japanese yen strengthened beyond 157 per dollar for the second consecutive session amid anticipation of a BOJ rate hike. Senior ruling party official Toshimitsu Motegi called for clearer BOJ communication on policy normalization. Prime Minister Kishida emphasized that policy normalization would bolster Japan’s growth. The yen surged approximately 2% over two weeks, possibly influenced by suspected government intervention, supported by BOJ data indicating purchases of nearly 6 trillion yen on July 11-12. Recent data also revealed that Japan sold around $22 billion in US Treasuries in May to strengthen reserves for potential market operations
The dollar index stabilized around 104.2 as investors evaluated the evolving US political landscape after President Biden withdrew from the reelection race and endorsed Vice President Harris. Despite former President Trump’s lead, market participants are reducing reliance on the “Trump trade.” The Federal Reserve is anticipated to start rate cuts in September amidst subdued inflation, with expectations for two more reductions by year-end. Investors are focusing on upcoming US economic releases, including PMIs, GDP figures, and the PCE price index report. The dollar traded rangebound against most major currencies but gained against the Chinese yuan, Australian dollar, and New Zealand dollar after an unexpected PBoC rate cut.
