Gold Hits New All-Time High of $2,469. This surge is fueled by expectations that the US Federal Reserve will start its easing cycle in September. The increase also coincides with rising speculation that former President Donald Trump could win the upcoming election. Gold (XAU/USD) currently trades at $2,467, marking a gain of over 1.70%.
Factors Driving Gold Prices
Lower-than-expected consumer inflation data last week bolstered the price of gold, as the Federal Reserve indicated a dovish stance. The CME FedWatch Tool shows a 100% probability of a 25-basis point rate cut in September, with some economists even predicting a 50 basis point cut.
Political Developments
Recent political events, including those involving former President Trump, have supported gold prices. If Trump wins, his policies are expected to increase tariffs and reduce taxes, likely leading to a higher US budget deficit and inflationary pressures.
Federal Reserve’s Position
Federal Reserve Chair Jerome Powell spoke at the Economic Club of Washington, expressing optimism about the economy’s performance. He noted that the Fed would consider lowering borrowing costs once it is confident inflation is heading towards the 2% target.
Economic Data Impact
The US Census Bureau reported flat retail sales for June, though core sales excluding autos rose significantly, surpassing forecasts. This mixed economic data has also influenced gold prices.
Daily Digest Market Movers
- Consumer Price Index (CPI): Weaker-than-expected CPI data pushed Gold Hits New All-Time High $2,400 as chances for Fed rate cuts increased, reflected by lower US Treasury yields.
- Retail Sales: June retail sales were flat as expected, but core sales increased by 0.4%, above the predicted 0.1%.
- Export and Import Prices: Both export and import prices declined in June, with export prices falling by 0.5% and import prices remaining flat.
- US Dollar Index (DXY): The DXY saw a minimal increase of 0.02%, standing at 104.27.
- Fed Rate Futures: December 2024 futures suggest a 53 basis point policy easing by the end of the year, up from 50 basis points the previous Friday.
- China’s Gold Purchases: The People’s Bank of China paused gold purchases in June, ending the month with 72.80 million troy ounces of gold.
Gold Technical Analysis
Gold’s bullish trend continues as it trades at record highs, surpassing the previous high of $2,450 on May 20. The Relative Strength Index (RSI) indicates continued momentum for bulls, nearing overbought levels.
- Resistance Levels: The next resistance is $2,475, with a target of $2,500.
- Support Levels: If prices fall below $2,450, the first support is at $2,400, followed by the July 5 high of $2,392. A further decline could see gold at $2,350.
Conclusion
Gold prices are on a significant upswing due to various economic and political factors. With the Federal Reserve’s dovish outlook and potential political changes, gold may continue to rise. For more daily updates on gold, visit Daily Gold Signal. For daily gold updates, check this category.
