Gold Prices Slip on Dollar's Edge Up, Investors Optimistic......
On Monday, gold prices experienced a slight decline due to a marginal increase in the dollar's value. However, investors remained optimistic that the U.S. Federal Reserve would soon halt its interest rate hikes.
The spot gold price fell by 0.1% to $1,952.74 per ounce at 0307 GMT, which was approximately $11 lower than the three-month high reached on the previous Friday.
Meanwhile, U.S. gold futures dropped 0.4% to $1,957.60.
The strengthening of the dollar, compared to its lows in April 2022, made gold more costly for holders of other currencies.
According to Matt Simpson, a senior market analyst at City Index, the recent rally in gold prices after the Consumer Price Index (CPI) data had slowed down, and this could lead to a technical retracement to the $1,940–$1,950 region.
Last week, data from the U.S. indicated a trend of disinflation, with consumer prices growing at their slowest rate in over two years.
Simpson also noted that while inflation remains high, the market's response is more focused on the relative changes in interest rates rather than their absolute levels going forward. This, along with central bank buying, is likely to support gold prices, especially if peak cycles are approaching.
Expectations are for rate hikes from the Federal Reserve and the European Central Bank in the upcoming week. Markets anticipate that the U.S. central bank may halt rate increases next year, while another hike is expected in Europe.
The prospect of lower interest rates decreases the opportunity cost of holding non-yielding bullion, which could further impact gold prices.
China, as the top consumer of gold, experienced sluggish economic growth in the second quarter, with only a 0.8% expansion compared to a 2.2% growth in the first quarter. As a result, there are expectations that Chinese authorities will implement more stimulus measures to support economic growth.
XAUUSD
SELL 1952 - 1954 💯💯
✅ TP1: 1947
✅ TP2: 1942
✅ TP2: 1937
🛑 SL: 1959
The spot gold price fell by 0.1% to $1,952.74 per ounce at 0307 GMT, which was approximately $11 lower than the three-month high reached on the previous Friday.
Meanwhile, U.S. gold futures dropped 0.4% to $1,957.60.
The strengthening of the dollar, compared to its lows in April 2022, made gold more costly for holders of other currencies.
According to Matt Simpson, a senior market analyst at City Index, the recent rally in gold prices after the Consumer Price Index (CPI) data had slowed down, and this could lead to a technical retracement to the $1,940–$1,950 region.
Last week, data from the U.S. indicated a trend of disinflation, with consumer prices growing at their slowest rate in over two years.
Simpson also noted that while inflation remains high, the market's response is more focused on the relative changes in interest rates rather than their absolute levels going forward. This, along with central bank buying, is likely to support gold prices, especially if peak cycles are approaching.
Expectations are for rate hikes from the Federal Reserve and the European Central Bank in the upcoming week. Markets anticipate that the U.S. central bank may halt rate increases next year, while another hike is expected in Europe.
The prospect of lower interest rates decreases the opportunity cost of holding non-yielding bullion, which could further impact gold prices.
China, as the top consumer of gold, experienced sluggish economic growth in the second quarter, with only a 0.8% expansion compared to a 2.2% growth in the first quarter. As a result, there are expectations that Chinese authorities will implement more stimulus measures to support economic growth.
XAUUSD
SELL 1952 - 1954 💯💯 ✅ TP1: 1947
✅ TP2: 1942
✅ TP2: 1937
🛑 SL: 1959
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