Gold Price Prediction: The Upside Prevails As Mixed US Data Pressures Dollar

Summary:
• Gold price rose on Monday as traders increasingly expected the Fed to lower interest rates after a series of mixed US economic data.

Gold price rose marginally on Monday, trading at $2,330 per ounce in the intraday session at the spot market after rising by 0.1 percent. The yellow metal had recorded an intraday high of $2,388 per ounce before retreating to a range-bound position as traders waited for signals on potential Fed US interest rate cuts.

The US Personal Consumption Expenditure (PCE) figures released last Friday reaffirmed market perception that the Fed will most likely announce the first interest rate cut in September. However, Fed members have maintained hawkish stands, stating that they are not in a hurry to vote for rate cuts in the absence of adequate data to show that inflation has been contained. That has prevented many investors from raising their bets on gold, after the geopolitical support from the Israel-Hezbollah conflict waned. The US dollar has been weakening against leading global currencies in recent days, with DXY index on course to register the third successive decline as of this writing.

Gold prices will likely have the upper hand in Monday’s late trading sessions on news of a decline in US manufacturing in June. The S&P Global US Manufacturing PMI came in at 51.6 percent, marginally below the forecast figure of 51.7. Also, the ISM Manufacturing PMI for June stood at 48.5, missing the forecast estimate of 49.2.

Looking ahead, there are multiple high-impact US economic data to look forward to later in the week.  The most anticipated, however, are Fed Chairman Jeremy Powell’s speech on Tuesday and Friday’s release of the June FOMC meeting report and NFP data.

Technical analysis

The momentum on gold price favours gains by the commodity, with the pivot at 2,318. That could see the bulls encounter the first resistance at 2,334, beyond which further control by the buyers could push the commodity to test 2,345. On the other hand, a decline below 2,318 will favour the sellers to take control, and the downside will likely find support at 2,308, extended control by the sellers at that point will not only break the support, but also invalidate the upside view. Furthermore, it could lead to a build-up in the downside momentum to test 2,296.