-1721118421.png)
Powell Acknowledges Inflation Fall
Gold prices are pushing higher today with the futures market testing resistance around the all-time highs on Tuesday. Growing expectations of forthcoming Fed easing are helping drive the move higher as gold bulls capitalise on fresh USD weakness. Speaking yesterday, Fed chairman Powell noted that the last three inflation readings had strengthened his confidence that US inflation is heading back to target.
Fed Easing Expectations
Pricing for a September rate cut has jumped sharply in recent weeks with the CME group now pricing a more than 90% chance of a cut, a stark jump from the roughly 55% pricing we saw ahead of the latest US CPI reading. Indeed, with a September cut now almost fully priced in, traders are looking ahead to the chances of a further cut this year with at least one further .25% reduction seen in Q4.
Bullish Gold Outlook
While this easing narrative gains traction, USD is likely to remain pressured which should keep gold supported. Looking ahead, US retail sales today will be closely watched. Any weakness in incoming US data should feed into easing expectations, giving gold and additional boost ahead of the July FOMC later this month.
Technical Views
Gold
The rally in gold has seen the market breaking back above the 2,364.93 level with price now testing the 2,427.54-level resistance and the bull channel highs. With momentum studies bullish, focus is on a breakout to fresh highs. Should we see any downside correction, 2,275.43 will be the main support area to note.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.