As the US Dollar's trajectory remains uncertain, the upward momentum in gold prices has taken a breather. This week, the yellow metal started with a slight decline as the 'big dollar' showed some strength.
Last week, soft inflation data in the US prompted the market to reconsider the Federal Reserve's approach to containing price pressures. As a result, Treasury yields have retreated from their recent highs. The 10-year note is currently trading around 3.8%, having previously touched 4.1% just over a week ago. Similarly, the 2-year bond, which reached a 17-year high of over 5.1% earlier this month, has now dropped below 4.8%.
In the past week, the DXY index suffered a loss of almost 2.25%, whereas the gold futures contract only gained 1.65%, resulting in the index reaching its lowest level since April 2022.
Looking forward, interest rate markets anticipate a 25 basis point increase in the overnight target rate during the upcoming Federal Open Market Committee (FOMC) meeting scheduled for July 26th.
As the Fed enters a blackout period ahead of its meeting, the week ahead could be volatile for the markets depending on the data points released. Investors will closely monitor various business sentiment surveys, retail sales, industrial production, housing market statistics, and jobs data.
Additionally, the US real yield, which represents the inflation-adjusted return from the 10-year part of the yield curve, may also impact gold prices, as it has shown a strong correlation with the precious metal in the past. Keeping an eye on this indicator could provide further insights into gold's potential direction.
XAUUSD
BUY LIMIT 1952 - 1950 💯💯
✅ TP1: 1955
✅ TP2: 1960
✅ TP3: 1965
🛑 SL: 1947
Last week, soft inflation data in the US prompted the market to reconsider the Federal Reserve's approach to containing price pressures. As a result, Treasury yields have retreated from their recent highs. The 10-year note is currently trading around 3.8%, having previously touched 4.1% just over a week ago. Similarly, the 2-year bond, which reached a 17-year high of over 5.1% earlier this month, has now dropped below 4.8%.
In the past week, the DXY index suffered a loss of almost 2.25%, whereas the gold futures contract only gained 1.65%, resulting in the index reaching its lowest level since April 2022.
Looking forward, interest rate markets anticipate a 25 basis point increase in the overnight target rate during the upcoming Federal Open Market Committee (FOMC) meeting scheduled for July 26th.
As the Fed enters a blackout period ahead of its meeting, the week ahead could be volatile for the markets depending on the data points released. Investors will closely monitor various business sentiment surveys, retail sales, industrial production, housing market statistics, and jobs data.
Additionally, the US real yield, which represents the inflation-adjusted return from the 10-year part of the yield curve, may also impact gold prices, as it has shown a strong correlation with the precious metal in the past. Keeping an eye on this indicator could provide further insights into gold's potential direction.
XAUUSD
BUY LIMIT 1952 - 1950 💯💯 ✅ TP1: 1955
✅ TP2: 1960
✅ TP3: 1965
🛑 SL: 1947
