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Gold Higher on Wednesday
Gold prices are looking more buoyant through the middle of the week with gold futures trading almost 1% higher on the session. A pull-back in USD is helping drive support for gold which is now up around 2.5% off last week’s lows. The move comes on the back of comments from Fed chairman Powell yesterday who acknowledged that the US was back on a disinflationary path. While Powell noted that the bank would need further confidence in inflation falling back to target before loosening, Powell referred to the last two CPI readings as showing that inflation was moving in the right direction at least.
Powell Refrains from Timing Comments
Speaking at the ECB’s Sintra Forum, Powell refrained from commenting on specific timing when asked whether the bank could cut in September. However, market pricing for a Q3 rate-cut is looking more favourable on the back of the comments, now sitting at 60%. If rate cut pricing creeps higher in coming weeks this should see USD trading lower, adding further support for gold.
NFP On Watch
Looking ahead this week, Friday’s NFP data will be the big release to watch. If we see fresh weakness in the jobs market, this should bolster easing expectations, creating support for gold prices. However, if we see any surprise uprise across the readings this will see September easing chances fading, pulling gold prices down as USD rallies.
Technical Views
Gold
Gold prices are turning higher once again with focus now shifting back to a test of the 2,364.93 level. A break higher here will open the way for a push up towards the 2,427.54 all-time highs in line with bullish momentum studies readings. To the downside, 2,275.43 remains key support to watch.
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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.