Gold prices were on the ascending trajectory on Tuesday, rising by 0.2 percent in the intraday session in the spot market to trade at $2,364 per ounce. The commodity’s appeal is underlined by the dollar’s weak standing in the wake of expected interest rate cuts by the US Federal Reserve. As of this writing, the CME Fedwatch tool shows that 76 percent of traders expect a rate cut in September. That said, gold is under pressure after China paused buying the commodity for the second month in a row, following a previous buying spree that stretched over 18 months.
The geopolitical premium on gold prices has also cooled down significantly after renewed hopes that the Israel-Hamas ceasefire talks could finally come into fruition. However, Israel’s return into central Gaza this week will limit the XAUUSD pair’s upside in the interim as investors will likely refrain from raising their bets until the warring parties sign the deal.
Fed Chairman Jerome Powell will be testifying before congress from 10.00 am ET on Tuesday, and markets will be looking to pick cues from his speech regarding the likely Fed interest rest decision. Two FOMC members are also scheduled to speak today, but Powell’s testimony will carry more weight. That’s because congressmen will likely push him to reveal as much as possible regarding the inflation trajectory, the jobs market and the Fed’s interest rate policy.
Gold prices are likely to stay on the upward trajectory if the spot market price stays above the 2,359 pivot mark. The first resistance will likely come at 2,364, but extended control by the buyers could break the resistance and send the XAUUSD pair to test 2,370. Alternatively, a move below 2,359 will signal control by the sellers, and the first support will likely come at 2,355. However, if the sellers extend that control, they could break the first support and invalidate the upside narrative. Also, that could build the momentum to move gold price to 2,350.
This post was last modified on Jul 09, 2024, 13:11 BST 13:11