Gold Slips Below $2,430; Eyes on Fed Rate Cut Speculations
Gold prices fell below $2,430 per ounce on Monday as investors awaited key US inflation data this week for insights into the Federal Reserve’s future monetary policy. Expectations for a Fed rate cut in September remain, supported by recent comments from Fed officials suggesting that inflation might be easing enough to justify a rate reduction next month. However, market opinions have become mixed following positive US job data last week, which eased fears that a weakening labor market could signal a recession. Despite this, gold’s appeal as a safe-haven asset persisted due to ongoing geopolitical tensions, including reports of another Israeli airstrike on Gaza and Moscow’s promise of a ‘tough response’ to Ukraine’s actions. The US producer inflation data is set to be released on Tuesday, with consumer inflation figures following on Wednesday.
In gold, the first support level is at 2,425. If this level is breached, the next supports to watch will be 2,390 and 2,375. On the upside, the initial resistance is at 2,436; if this level is surpassed, the next targets will be 2,450 and 2,500.
Markets Show Caution Before the US Inflation Report, Yen Under Pressure
Global markets presented cautious optimism and uncertainty as traders awaited key economic data and central bank decisions. The dollar index remained steady at 103.1, with traders holding back significant moves before the US inflation data that could influence the Federal Reserve’s next steps. The Japanese yen weakened, falling for the fifth time in six sessions, as uncertainty over the Bank of Japan’s future rate hikes persisted despite ongoing inflationary pressures in Japan. Gold prices eased slightly below $2,470 per ounce but stayed near record highs, driven by its safe-haven appeal during escalating geopolitical tensions involving Israel and Ukraine. In the UK, payrolled employment increased by 24,000 in July, supporting a 20-pip rally in GBP/USD, with strong gains in the health and social work sector contributing to the overall employment growth. Markets are now focused on upcoming US inflation data, which could provide further direction for global currencies and commodities.
Dollar Index Holds Steady Before the US Inflation Data
The dollar index remained steady at around 103.1 on Tuesday as traders avoided making significant moves before key US inflation data this week, which could reveal whether price growth has continued to stabilize. US producer inflation data will be released later today, followed by consumer inflation figures on Wednesday and retail sales numbers on Thursday. Over the weekend, Fed Governor Michelle Bowman noted that despite softer inflation readings for May and June, inflation is still uncomfortably above the FOMC’s 2% target. As a result, markets have reduced their expectations for Federal Reserve rate cuts, now predicting a 25 basis point reduction in September rather than a more substantial 50 basis point cut. However, analysts still foresee over 100 basis points of total Fed easing this year. The dollar showed little change against most major currencies but continued to make slight gains against the yen as the unwinding of yen carry trades lost momentum.
In the pair, the first support level is at 1.0900. If this level is breached, the next supports to watch will be 1.0850 and 1.0800. On the upside, the first resistance is at 1.0960; if this level is surpassed, the next targets will be 1.1000 and 1.1050.
UK Employment Up 24,000 in July, Supporting GBP/USD
In July 2024, the number of payrolled employees in the United Kingdom increased by 24,000 to reach 30.4 million, following a revised gain of 14,000 the previous month. Year-on-year, payrolled employment grew by 0.8% or 252,000, largely due to a rise in the health and social work sector, which added 163,000 positions. Regionally, the largest annual increase in payrolled employment occurred in Ards and North Down, with a growth rate of 2.9%, while Westminster saw the biggest decline at -2.6%. Additionally, the median monthly pay rose by 5.6% to £2,396. The highest pay increase was seen in the other service activities sector at 8.4%, whereas the public administration and defense sector experienced the largest decrease at -2.4%. With this economic data, GBP/USD has rallied approximately 20 pips.
For GBP/USD, the initial support lies at 1.2740, followed by 1.2650 and 1.2600 below. On the upside, the first resistance is at 1.2820, with subsequent levels at 1.2880 and 1.2950 if the pair breaks above this resistance.
US Inflation Data Softens the Dollar Index, Yen Strengthens, and Gold Nears Highs
The dollar hovers around 102.6 as softer US producer inflation data raises expectations for Fed rate cuts, with EUR/USD eyeing the 1.1000 resistance. The yen strengthens past 146.5 per dollar, recovering from recent lows as traders adjust to the inflation outlook. Meanwhile, gold remains near record highs at $2,460 per ounce, supported by its safe-haven appeal amid easing inflation and geopolitical tensions. The GBP/USD pair drops as UK core inflation slows more than expected, raising the likelihood of Bank of England rate cuts. Dive into our analysis for more details on these market movements.
EUR/USD Eyes 1.1000 Resistance Amid Dollar Softness
The dollar index hovered around 102.6 on Wednesday, following a 0.5% decline in the previous session, as softer US producer price data raised expectations for Federal Reserve interest rate cuts. Investors are awaiting the July CPI report for confirmation that price growth is continuing to moderate. On Tuesday, US producer prices increased by 0.1% in July from the previous month, falling short of the anticipated 0.2% rise, and core producer prices remained unexpectedly flat. As a result, markets are now pricing in a higher likelihood of a 50-basis-point Fed rate cut in September and anticipate over 100 basis points of total easing this year. With the weakening dollar index, EUR/USD has started testing the 1.1000 resistance level once again.
In the pair, the first support level is at 1.0950. If this level is breached, the next supports to watch will be 1.0900 and 1.0850. On the upside, the first resistance is at 1.1000; if this level is surpassed, the next targets will be 1.1050 and 1.1100.
Softer US Inflation Data Improves Gold’s Safe-Haven Appeal
Gold eased to around $2,460 per ounce on Wednesday but remained near record highs, as new evidence of softer US inflation increased expectations for a larger interest rate cut by the Federal Reserve in September. Annual producer inflation slowed to 2.2% in July, down from 2.7% in June and approaching the Fed’s 2% target. Additionally, gold’s appeal as a safe-haven asset continues to attract investors amid escalating geopolitical tensions, including Iran’s potential retaliatory actions against Israel and Ukraine’s activities in Russia. Market participants are awaiting the US CPI data later in the day for further clues on inflation. Currently, the CME FedWatch Tool indicates a 50% probability of a 50-basis-point rate cut in September. Lower interest rates typically increase the attractiveness of non-interest-bearing assets like gold.
In gold, the first support level is at 2,450. If this level is breached, the next supports to watch will be 2,430 and 2,412. On the upside, the initial resistance is at 2,475; if this level is surpassed, the next targets will be 2,450 and 2,500.
Inflation Data Drives EUR/USD Higher, Yen and Gold Strengthen
The dollar remains under pressure around 102.6 as softer US producer inflation data fuels expectations for Fed rate cuts, pushing EUR/USD toward the 1.1065 resistance level. The yen strengthens past 146.5 per dollar amid market uncertainty over BOJ policy and declining business sentiment. Meanwhile, gold holds near record highs at $2,460 per ounce, supported by expectations of a significant Fed rate cut and ongoing geopolitical tensions. The GBP/USD pair declines as UK inflation data increases the likelihood of Bank of England rate cuts. Explore our detailed analysis for a deeper understanding of these market trends.
EUR/USD Eyes 1.1065 Resistance Amid Dollar Weakness
On Wednesday, the dollar index traded around 102.6, following a 0.5% decline in the previous session. This drop was driven by disappointing US producer price data, which strengthened expectations for Federal Reserve interest rate cuts. Investors are now awaiting the highly anticipated July CPI report for further confirmation that inflation is continuing to moderate. Data released on Tuesday indicated that US producer prices increased by just 0.1% in July from the previous month, falling short of the anticipated 0.2% rise, while core producer prices remained unexpectedly unchanged. The dollar has experienced losses against most major currencies like Euro amid a rally in risk assets.
In the pair, the first support level is at 1.0950. If this level is breached, the next supports to watch will be 1.0900 and 1.0850. On the upside, the first resistance is at 1.1065; if this level is surpassed, the next targets will be 1.1100 and 1.1150.
UK Inflation Data Pushes GBP/USD Lower, Increases Likelihood of Bank of England Rate Cuts
The British pound fell to $1.28, retreating from a three-week high reached earlier in the month, following UK inflation data that heightened expectations for a Bank of England rate cut. Annual inflation came in at 2.2%, matching projections but falling short of prior estimates. Services inflation decreased to 5.2%, its lowest level in two years and below the central bank’s forecast of 5.6%. Core inflation also decelerated more than anticipated. Hence, the probability of a 25 basis point rate cut in September rose to 47% from 36% before the data release. Market participants are now pricing in two additional 25 basis point cuts by year-end. However, recent labor market data revealed unexpected strength: the unemployment rate declined to 4.2% for the three months ending in June, defying expectations of an increase, while wage growth moderated to 5.4% from 5.8%, remaining slightly above the Bank of England’s forecast.
For GBP/USD, the initial support lies at 1.2790, followed by 1.2740 and 1.2700 below. On the upside, the first resistance is at 1.2880, with subsequent levels at 1.2950 and 1.3000 if the pair breaks above this resistance.
US Economic Data Supports Dollar, Yen Dips on Political Worries
On Friday, the Dollar Index remained steady around 103 on strong US economic data that eased recession fears, although it faced some pressure from soft inflation data. Meanwhile, the Japanese yen dropped to a two-week low past 149 per dollar, influenced by robust US data and political uncertainty in Japan. Gold held steady at around $2,450 per ounce, attracting safe-haven demand with Middle East tensions, though its momentum was moderated by shifting expectations for a Fed rate cut in September. In the UK, retail sales rebounded in July, rising by 0.5% month-over-month and 1.4% annually, driven by gains in non-food stores and non-store retail trade.
Dollar Index Holds Steady on Rate Cut Speculations
The dollar index traded around 103 on Friday, following a 0.5% gain in the previous session, supported by strong US economic data that eased recession fears. Retail sales in the US rose by 1% in July from the previous month, significantly outperforming market forecasts of 0.3%, reflecting robust consumer spending. Additionally, new unemployment claims fell unexpectedly for a second consecutive week, easing concerns about the labor market. However, the dollar faced some pressure from soft US inflation data for July. Markets are expecting that the Federal Reserve will begin cutting interest rates in September, though there is still uncertainty over whether the reduction will be 25 or 50 basis points.
In the pair, the first support level is at 1.0950. If this level is breached, the next supports to watch will be 1.0900 and 1.0850. On the upside, the first resistance is at 1.1015; if this level is surpassed, the next targets will be 1.1065 and 1.1100.
Gold remained steady around $2,450 per ounce on Friday, poised to record a weekly gain following a decline the previous week. The metal continues to attract investors as a safe-haven asset amid escalating tensions in the Middle East, particularly regarding concerns about a potential Iranian retaliatory strike against Israel. Meanwhile, recent US economic data has tempered expectations for a more aggressive Federal Reserve stance on its anticipated September rate cut. July retail sales surged unexpectedly, signaling strong consumer spending, and initial claims fell to their lowest level in a month, alleviating concerns about a weakening labor market. As a result, investors are now predicting a 25 basis point rate cut by the Fed in September, shifting away from the previously expected 50 basis point reduction. This shift has moderated gold’s momentum due to its sensitivity to interest-bearing assets.
The first support level for gold is at 2,450. If this level is breached, the next supports to watch will be 2,430 and 2,412. On the upside, the initial resistance is at 2,475; if this level is surpassed, the next targets will be 2,450 and 2,500.
Fed Rate Cut Expectations Boost Yen, Pressure Dollar
The dollar weakened significantly due to growing expectations of Federal Reserve interest rate cuts, fueled by concerns over the US economy. Conversely, the Japanese yen strengthened as its economy showed resilience. Gold prices remained elevated amidst geopolitical tensions and safe-haven demand. Currency pairs like EUR/USD and GBP/USD exhibited specific technical levels to watch for potential price movements.
Gold Prices Await Powell’s Speech and FOMC Minutes
Gold prices remained near a record high of $2,500 per ounce on Monday, driven by strong demand for safe-haven assets. The Federal Reserve’s policy outlook is being closely analyzed, particularly following recent positive US economic data. This has led to market expectations for a 25 basis point rate cut in September, with a total of 100 basis points of cuts anticipated over the remaining three Fed meetings this year.
US Secretary of State Antony Blinken is in the Middle East to mediate ceasefire talks between Gaza and Israel. However, ongoing strikes from Israel and mixed statements from Hamas and Israel have reduced hopes for a resolution. Meanwhile, tensions are also high between Ukraine and Russia, with Ukrainian forces making advances into Russian territory. Investors are now waiting for Fed Chair Powell’s speech and the latest FOMC minutes later this week for further clarity on monetary policy.
The first support level for gold stands at 2,470. If this level is breached, the next supports to watch will be 2,450 and 2,412. On the upside, the initial resistance is at 2,510; if this level is surpassed, the next targets will be 2,550 and 2,580.
For GBP/USD, the initial support lies at 1.2920, followed by 1.2860 and 1.2800 below. On the upside, the first resistance is at 1.3000, with subsequent levels at 1.3050 and 1.3100 if the pair breaks above this resistance.
Dollar Weakness Drives EUR/USD Higher, Yen Steady, and Gold Holds Near Highs
The dollar index dropped below 102, reaching its lowest point in over seven months as markets brace for potential Federal Reserve rate cuts. This decline has pushed EUR/USD closer to key resistance at 1.1100, with further potential to 1.1150 and 1.1190 if momentum continues. Meanwhile, the yen held steady at 146.5 per dollar, reflecting similar expectations of rate cuts, while gold remained near record highs around $2,500 per ounce, supported by its safe-haven status and anticipation of Fed Chair Jerome Powell’s upcoming speech at Jackson Hole. The GBP/USD pair also remains strong above 1.29, though gains may slow as the market awaits UK PMI data and BoE Governor Bailey’s speech.
Dollar Index Drops Below 102 as Markets Brace for Potential Fed Rate Cuts
On Tuesday, the dollar index remained below 102, continues to decline over the past two sessions and reaching its lowest point in over seven months. This drop reflects strong expectations that the Federal Reserve will soon begin reducing interest rates. Investors are also preparing for Fed Chair Jerome Powell’s upcoming speech at Jackson Hole, Wyoming, on Friday, looking for indications on whether the central bank might cut rates by 25 or 50 basis points in September. Also today, the upcoming inflation data in Europe will provide clues about whether the ECB will continue its interest rate cuts, and it will also be decisive in determining whether the strength of the currency pair can be maintained.
In the EUR/USD pair, the first support level is at 1.1065. If this level is breached, the next supports to watch will be 1.1000 and 1.0950. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1190.
Gold Remains Near Record Levels as Investors Eye Fed Rate Cut
On Tuesday, gold remained near $2,500 per ounce, staying close to record highs due to its status as a safe haven while investors awaited further signals from the Federal Reserve. On Monday, US Secretary of State Antony Blinken announced that Israel had agreed to a proposal aimed at resolving the delays in a Gaza ceasefire and called on Hamas to follow suit. Despite this, concerns about a wider conflict persist following Hamas’s claim of responsibility for a bombing in Tel Aviv. Additionally, markets are preparing for Fed Chair Jerome Powell’s speech at Jackson Hole on Friday, seeking clues about the extent of the anticipated rate cut by the Federal Reserve in September.
In gold, the first support level is at 2,470. If this level is breached, the next supports to watch will be 2,450 and 2,412. On the upside, the initial resistance is at 2,510; if this level is surpassed, the next targets will be 2,550 and 2,580.
ECB Considers Rate Cut, Dollar Index Falls as Fed Decision Looms
The ECB is considering a rate cut in September due to economic concerns in the Eurozone. The dollar index dropped to its lowest level of the year below 101.5, as investors await the Federal Reserve’s upcoming rate decision and Chair Jerome Powell’s speech at the Jackson Hole symposium. The market predicts around 100 basis points in rate cuts this year, with uncertainty about the size of September’s cut. Gold prices remain strong above $2,495, holding gains after a record high of $2,532, with key support at $2,500. The Japanese yen paused its rally against the USD, with the USD/JPY pair finding support around 144.00 and resistance near 148.20, amid expectations of a potential BoJ rate hike. The GBP/USD pair is nearing a breakout above 1.3140, with the key resistance level at 1.3050.
