Muhammad Umair, PhD
Gold Predictors
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The upcoming US July PCE inflation data is expected to be pivotal in determining investor strategies amidst fluctuating yields and a varied dollar performance
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Gold is trying to find support before the PCE inflation data.
Recently, IT-related concerns initially drove investments towards safe-haven assets like core bonds, causing a significant drop in German yields. However, the trend reversed after the opening of US markets which was supported by unexpectedly strong US Q2 GDP growth of 2.8% and other positive economic indicators. This suggests the Federal Reserve might not change its policy soon. Despite this, mixed results from the GDP price index and core PCE deflator highlight persistent inflationary pressures that could influence gold prices. Internationally, Asian markets showed limited gains, indicating ongoing investor caution, while a weaker dollar boosted gold's appeal. Key US economic data, especially the expected cooldown in July PCE inflation, will play a crucial role in shaping investor strategies in the face of fluctuating yields and a mixed dollar performance.
From a technical perspective, gold has declined from the strong resistance, as previously discussed, and is now seeking the next bottom. The minor support at $2385 has been breached, but the major support level of $2365 still holds. The market is currently awaiting the Core PCE price index data, which is likely to determine gold's next direction. Volatility remains high, and there is considerable uncertainty in the market.
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