Gold prices are on the rise for the second day in a row as a combination of factors is attracting buyers. The US Dollar remains weak due to expectations of a Fed rate cut in September, which is benefiting the Gold market. Geopolitical risks are also supporting the precious metal’s safe-haven status, although there is caution among traders.
The Gold price is currently trading around $2,400 per troy ounce during the European session. The recent release of US Personal Consumption Expenditures (PCE) Price Index data showed a modest increase in inflation in June, leading to speculations of an upcoming rate cut by the Federal Reserve. This has caused a decline in US Treasury bond yields, putting pressure on the USD and benefiting Gold prices.
Despite the support from geopolitical tensions in the Middle East, the upbeat sentiment in global equity markets is limiting the upside potential for Gold. Traders are also waiting for the outcome of the upcoming two-day Federal Open Market Committee (FOMC) meeting and key US economic data releases scheduled for the week.
Technical analysis shows that while there have been positive movements in Gold prices, there is caution among traders as the price struggles to break above key resistance levels. Bulls are looking for a sustained move above $2,400 to confirm a bullish trend, while bears are eyeing support levels around $2,380.
Gold is widely considered a safe-haven asset and a hedge against inflation and depreciating currencies. Central banks, especially from emerging economies, are increasing their Gold reserves to strengthen their currencies and improve economic stability. The price of Gold is influenced by various factors, including US Dollar movements, geopolitical instability, and global economic conditions.
Investors should be aware of the risks involved in trading Gold and conduct thorough research before making any investment decisions. The views expressed in this article are based on current market conditions and may change as new information becomes available. It is important to stay informed and seek professional advice when trading in the Gold market.