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- Gold price remains broadly flat amid several tailwinds on Friday.
- Investors were divided over the size of the Federal Reserve’s interest rate cuts in September.
- Federal Reserve officials acknowledge easing inflation and slowing demand for labor.
Gold (XAU/USD) rose to near $2,430 in New York trading on Friday. The near-term outlook for the precious metal remains strong amid strong speculation that Federal Reserve (Central Bank) will start reducing interest Rates In September.
However, investors are divided on whether the Fed will show aggression in the transition to policy normalization by announcing a 50 basis point rate cut or a 25 basis point cut.
According to the CME FedWatch tool, 30-day Fed Funds futures pricing data shows traders see a 54.5% chance of a 50 basis point rate cut in September. For the full year, the data points to a 100 basis point rate cut by the Fed.
Meanwhile, the US dollar and bond yields are correcting after failing to hold onto gains prompted by weaker-than-expected US preliminary data. Unemployment claims For the week ending August 2nd. US Dollar Index The U.S. Dollar Index (DXY), which tracks the value of the U.S. dollar against six major currencies, fell to around 103.15 from a four-day high of 103.50. The yield on the 10-year U.S. Treasury note fell to around 3.97%.
Data released Thursday showed the number of people filing for unemployment benefits for the first time fell to 233,000, compared with estimates of 240,000 and the previous figure of 250,000 (revised up from 249,000). While the slowdown in applications for unemployment benefits is not enough to dampen market expectations of an interest rate cut sooner, the data is not enough to dampen market expectations of an early rate cut.
Daily Market Movers Summary: Gold Price Holds Steady Amid Several Supporting Factors
- Gold price is holding above $2,400 on expectations of aggressive rate cuts from the Federal Reserve and ongoing geopolitical tensions. Expectations of aggressive rate cuts have prompted fresh action. stock Global stock markets fell sharply on concerns about a possible slowdown in the US economy due to a sharp slowdown in job growth and a high unemployment rate.
- Fed policymakers have acknowledged that labor market conditions are slowing and are confident that inflation is returning to normal, which has helped the central bank reach its 2% target. Officials have made clear that their decisions will be based on economic data, not stock market turmoil and political considerations.
- On Thursday, Chicago Fed President Austin Goolsbee said, “We are not in the business of responding to the stock market. We are in the business of maximizing jobs and stabilizing prices,” Reuters reported.
- Meanwhile, rising tensions in the Middle East continue to improve gold’s appeal as a safe havenInvestors are concerned that Iran may respond to the killing of the Hamas leader with an airstrike in Tehran.
- Going forward, the price of gold will be influenced by the US consumer price index data for July, which will be released on Wednesday. The inflation data will indicate whether the current market expectations for interest rate cuts are appropriate.
US dollar price today:
US dollar price today
The table below shows the percentage change in the value of the US Dollar (USD) against the major currencies listed today. The US Dollar was the strongest against the Euro.
| US Dollar | euro | GBP | JPY | Almost | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| US Dollar | 0.02% | -0.18% | -0.10% | 0.00% | -0.00% | -0.17% | -0.16% | |
| euro | -0.02% | -0.17% | -0.06% | -0.01% | -0.01% | -0.19% | -0.18% | |
| GBP | 0.18% | 0.17% | 0.09% | 0.15% | 0.16% | -0.02% | 0.01% | |
| JPY | 0.10% | 0.06% | -0.09% | 0.05% | 0.07% | -0.12% | -0.07% | |
| Almost | -0.00% | 0.01% | -0.15% | -0.05% | -0.01% | -0.17% | -0.14% | |
| Australian Dollar | 0.00% | 0.01% | -0.16% | -0.07% | 0.00% | -0.17% | -0.14% | |
| New Zealand Dollar | 0.17% | 0.19% | 0.02% | 0.12% | 0.17% | 0.17% | 0.03% | |
| Swiss Franc | 0.16% | 0.18% | -0.01% | 0.07% | 0.14% | 0.14% | -0.03% |
The heat map shows the percentage changes of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the US dollar from the left column and scroll along the horizontal line to the Japanese yen, the percentage change displayed in the box will be USD (base)/JPY (quote).
Technical Outlook: Gold price maintains gains above $2400
Gold price is trading in a channel formation on the daily time frame, which is slightly higher but has shown a broad sideways performance for more than three months. The 50-day exponential moving average (EMA) near $2,370 continues to provide support for gold bulls.
The 14-day Relative Strength Index (RSI) is oscillating in the 40.00-60.00 range, indicating indecision among market participants.
We could see a fresh rally if gold breaks above its all-time high of $2,483.75, which would push it into uncharted territory.
On the downside, the ascending trend line at $2,225, drawn from the October 6 low near $1,810.50, will act as a major longer-term support.
Economic indicator
Consumer Price Index Excluding Food and Energy (YoY)
Inflationary or deflationary trends are measured by periodically collecting prices of a basket of representative goods and services and presenting the data in the form of the Consumer Price Index (CPI). The CPI data is compiled on a monthly basis and released by US Department of Labor StatisticsThe year-on-year CPI reading compares commodity prices in the reference month to the same month a year earlier. The CPI excludes the so-called food and energy components, which are more volatile, to give a more accurate measure of price pressures. Generally, a higher reading indicates a rise in the US dollar (USD), while a lower reading is seen as bearish.
