- XAU/USD dips 0.39%, targeting the 200-day EMA as traders anxiously await US inflation numbers.
- Fed’s varying tone: While Harker hints at steady rates, Bowman pushes for hikes to control inflation, impacting Gold’s momentum.
- US 10-year Treasury bond yield hovers at 4%, while the DXY index drops slightly, failing to increase appetite for Gold.
Gold price losses traction for the third straight day in the week tumbles 0.39% below its opening price as sellers eye a test of the 200-day Exponential Moving Average (EMA) at $1,908.12. Traders bracing for US inflation data release keep the yellow metal price depressed, exchanging hands at XAU/USD changes hands at $1,917.54.
Gold traders weigh US inflation projections and mixed Federal Reserve signals; eyes set on September rate hike odds
The XAU/USD treads water ahead of the release of the July inflation report, which is expected to show the deflationary process remains intact. Estimates for the Consumer Price Index monthly and annually stand at 0.2% and 3%, respectively. Monthly data would remain unchanged from June’s, while year-over-year (YoY) would show an improvement from 3.3%. Excluding volatile items, the so-called core CPI is foreseen to remain at 0.2% MoM, with annual inflation estimated to be 4.8%, the same as in June.
However, XAU/USD buyers could remain hopeful for higher prices, as most Federal Reserve (Fed) officials have begun to turn neutral or even dovish, as shown by Philadelphia Fed President Patrick Harker stating that rates could remain at current levels, barring any deterioration on US economic data, said on Tuesday. Contrarily, Fed Governor Michelle Bowman stated the Fed needs to keep the pedal to the metal, lifting rates to curb inflation.
Expectations for a rate hike in September remained depressed, with odds at a 13.5% chance, as shown by the CME FedWatch Tool. Any Fed signals for rate cuts in 2024 could increase the appetite for the non-yielding metal, which is suffering from high US Treasury bond yields.
The US 10-year Treasury bond yield dives two basis points to 4.00% but remains above the figure, a headwind for XAU/USD, while the US Dollar Index (DXY), a measure of the greenback’s performance against its peers, loses traction, edges to 102.436, down 0.10%.
XAU/USD Price Analysis: Technical outlook
XAU/USD price is depressed after testing the lows of June at around $1,893.12, extended its gains toward the July 20 swing high at $1,987.42, though buyers’ failure to crack the latter exacerbated a pullback toward current gold price. On its way south, XAU/USD breached the 20, 50, and 100-day EMAs and as of writing, is breaking below a five-month-old support trendline that passes at around $1,922/$1,930. A daily close would expose the 200-day EMA, followed by the $1,900 figure.
From an oscillator’s view, the Relative Strength Index (RSI) and the three-day Rate of Change (RoC) suggest further downside expected as sellers remain in charge.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD rebounds on Thursday after midweek pullback
EUR/USD tuned back into the high end on Thursday, getting bolstered by a broad-market selloff in the Greenback. US data that printed better than expected helped to ease concerns of a possible economic slowdown within the US economy looming over the horizon.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Ethena Labs launches new UStb stablecoin backed by BlackRock's BUIDL token
Ethena Labs announced on Thursday that it has released a new stablecoin product, UStb. The new stablecoin will be fully collateralized by BlackRock's USD Institutional Digital Liquidity Fund and function similarly to a traditional stablecoin.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.