Gold prices held steady around $2,310 amid high US interest rates and Middle East tensions. Despite the Fed’s hawkish stance, strong demand in Asia supports gold’s position in the market. Upcoming Fed speeches and unemployment claims data are crucial to gold’s short-term price direction.
Geopolitical tensions and Fed policies affect gold prices
cryptokoin.comAs you follow from , gold prices remain stagnant at $2,310. High interest rates in the USA and geopolitical tensions in the Middle East are effective in this. Despite being viewed as a safe haven, gold has failed to benefit significantly from improving situations, including the potential easing of tensions between Israel and Hamas. There was no major economic announcement in the middle of the week. Despite this, gold is trading with a positive but limited outlook. The strength of the US dollar and recent hawkish comments from Federal Reserve officials underscore expectations that US interest rates could remain higher for an extended period of time.
The opportunity cost of holding non-returning assets increases with this scenario. Therefore, this means a decline for gold prices. Despite market speculation, statements from regional Fed leaders, including Boston Fed President Susan Collins, suggest inflation control remains a priority and rate cuts are not imminent. The probability of a rate cut in September decreased from 85% to below 55%.
Central bank demand and consumer sentiment impact gold
On the demand side, the People’s Bank of China increased its reserves by 60,000 troy ounces last month. Thus, the yellow metal continues to see significant purchases from central banks. This indicates that institutional confidence in the precious metal continues. There is also strong demand from over-the-counter markets and consumers in Asia, primarily China and India. This provides a counterbalance to pressures arising from US monetary policy.
Upcoming economic indicators, such as Initial Unemployment Claims expected around 220,000 in the US and the Consumer Confidence Index expected to drop from 77.2 to 76.0, will provide further insight into the economic conditions affecting gold’s trajectory. Looking ahead, the gold market is bracing for more Fed communications and critical CPI data.
Gold prices forecast
Market analyst Arslan Ali evaluates the technical outlook of gold. The gold price is currently above the pivot point of $2,307.29. Moreover, it is trading just below the 50-day Exponential Moving Average (EMA) at $2,316.24. This indicates a narrow trading range. Immediate resistance levels are $2,336.20, $2,351.65, and $2,369.37.
Support levels are more specifically set at $2,294.59, $2,277.60, and $2,260.34, providing cushions that could offset price declines. The technical structure includes a bearish trend line forming resistance near $2,320. Moreover, a double-bottom pattern near $2,300 provides strong support for gold. This setup suggests that staying above $2,307 might favor the bulls. However, it also points out that it is possible that falling below will trigger a sharp decline in prices.
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