Gold prices stagnate at 2 328 dollars during the Asian session, reflecting continued uncertainty over the next decisions of the US Federal Reserve on interest rates.
Mixed economic data
Recent economic data releases have presented mixed signals, fueling expectations that the Fed may cut rates at its September meeting. Statements by various Fed officials have added to this uncertainty, prompting mixed reactions in the markets.
US dollar falls
The decline of the American dollar is influenced by a cautious sentiment in the markets and growing expectations of a rate cut in September. According to the CME FedWatch Toolthere is a 58% probability of a 25 basis point cut in September. These expectations keep pressure on the US dollar, contributing to the rise in gold prices.
Treasury yields rise
In Treasury yields, 10-year yields rose 1.67%, limiting gold’s gains. San Francisco Fed President Mary Daly stressed the importance of a cautious approach to controlling inflation, citing the risk of rising unemployment.
She stressed the need to restore price stability without disrupting the economy, noting that while there is still work to be done to reduce inflation, the Fed must also prepare for a possible rise in unemployment if the labor market slows.
Flexibility in monetary policy
Richmond Fed President Thomas Barkin, speaking at the Center for Global Interdependence in Paris, advocated a cautious approach to monetary policy. He acknowledged the lingering effects of policy adjustments and the possibility of further economic slowdown, stressing the need for flexibility in the face of new economic data.
Barkin also cited upward pressure on prices from the services and housing sectors, suggesting that recent rate hikes may not be as taxing on the economy as previously anticipated given its current resilience. Those comments tempered market reactions Monday.
Technical forecasts and outlook
Currently, gold is trading at 2 325,96 dollarsdown 0.25%. The 4-hour chart highlights key price levels for traders to watch closely. The pivot point is set at 2 319,98 dollarsserving as a critical level for potential price movements.
Immediate resistance is identified at 2 338,28 dollarsfollowed by additional resistance levels at 2 354,09 dollars et 2 368,78 dollars. On the downside, immediate support is at 2 310,26 dollarswith additional support at 2 297,61 dollars et 2 286,99 dollars.
Technical indicators show a relative strength index (RSI) at 48, indicating neutral momentum. The exponential moving average (EMA) at 50 days is positioned at 2 325,42 dollarsproviding short-term support. A notable technical pattern includes a triple top resistance near 2 338 dollars.
In summary, the outlook for gold remains bullish above the pivot point of 2 320 dollars.
