The gold price rebound factors (XAU/USD) is facing significant selling pressure, reaching a two-week low during the early European session. Despite this, the metal has managed to attract some buyers around the $2,365 mark, partially offsetting earlier losses. This shift comes as market participants anticipate the Federal Reserve’s rate-cutting cycle to commence in September, impacting the US Dollar (USD) and benefiting gold.
Current Market Dynamics
Gold Price Rebound Factors have been under heavy selling pressure for the second consecutive day, dropping to a two-week low. This decline is partly due to the Federal Reserve’s anticipated rate cuts, which have weakened the USD. The risk-off sentiment, characterized by weaker global equity markets, also supports gold prices as investors seek safe-haven assets.
Risk-Off Sentiment and Federal Reserve Expectations
The global economic outlook has been dimmed by disappointing flash PMIs and a slowdown in both manufacturing and services sectors. These developments contribute to the risk-off mood, bolstering gold’s appeal. Former Federal Reserve President William Dudley’s call for a rate cut amid recession fears has further solidified expectations for monetary easing. Market participants are now pricing in a 25 basis points (bps) rate cut for September, with potential further reductions anticipated in the following months.
Technical Analysis
From a technical perspective, gold prices are struggling to move above the $2,400 mark. The breakdown below the 100-period Simple Moving Average (SMA) and key support levels has triggered bearish sentiment. Oscillators on the daily chart show negative traction, suggesting that the path of least resistance is downward. Gold prices may face resistance around $2,400, with further challenges at the $2,412 and $2,423 levels. A sustained push beyond these levels could lead to a rally towards the $2,469-$2,470 region.
Upcoming US Macro Data
The focus will remain on critical US economic data, including the Advance Q2 GDP report and the Personal Consumption Expenditures (PCE) Price Index. These releases will provide insights into the Federal Reserve’s future policy decisions and could influence gold price movements. Additionally, US political uncertainty may add to the gold price’s volatility.
In summary, the gold price is currently navigating through a complex environment influenced by Federal Reserve policies, global risk sentiment, and technical factors. For the latest updates and in-depth analysis, visit Daily Gold Signal and explore the Daily Gold Update section.
