Gold price faced a setback on Monday as the US Dollar gained strength. Investors are gearing up for the Federal Open Market Committee (FOMC) meeting, set to begin on July 30 and conclude the following day. The anticipation surrounding the Federal Reserve’s decisions has influenced market movements, pushing gold prices lower. Currently, XAU/USD is trading at $2,377 after reaching a peak of $2,403 earlier in the day.
Wall Street and Currency Impact
Wall Street’s sentiment remains slightly optimistic, yet the strong US Dollar continues to exert pressure on gold price. High retail prices in Asia and economic concerns in China have also dampened consumer demand for gold.
Geopolitical Risks
Geopolitical tensions have somewhat mitigated gold’s losses. Recent events, such as Hezbollah’s rocket strike on Israel, have raised concerns about potential escalation in the Middle East.
Upcoming Economic Data
Traders are awaiting critical economic data from the US, including the JOLTS Job Openings report, ADP Employment Change data, and the FOMC’s decision. The Federal Reserve is anticipated to keep rates steady, but market participants expect the central bank to set the stage for future rate cuts. Data from the CME FedWatch Tool indicates a 100% probability of a quarter-point cut in September.
Market Analyst Insights
Forex.com’s market analyst, Fawad Razaqzada, suggests that if the Fed adopts a dovish stance, there could be up to three rate cuts before the year ends.
Key Economic Releases
Recent US inflation data shows progress toward the 2% target, but June’s Core PCE figures were higher than expected. Besides the Fed’s decision, other major central banks, including the Bank of Japan and the Bank of England, will also make policy announcements. The Bank of Japan is expected to increase rates by 15 basis points, while the Bank of England is likely to start its easing cycle on August 1.
Market Expectations
According to data from the Chicago Board of Trade (CBOT), traders are anticipating 54 basis points of easing by year-end, based on the December 2024 fed funds rate futures contract.
Gold Price Trends
Gold prices have struggled to maintain levels above $2,400, with buyers unable to clear this threshold decisively. Despite forming a ‘bullish harami’ pattern, momentum indicators like the Relative Strength Index (RSI) suggest a temporary pause in buying activity.
Support and Resistance Levels
Currently, XAU/USD is consolidating around $2,370-$2,380. A recovery above $2,400 could push prices towards the $2,450 mark and potentially to the all-time high of $2,483, followed by the $2,500 level. Conversely, a drop below the 50-day moving average at $2,358 might lead to further declines, with support levels at $2,353 and $2,326.
Gold prices are under pressure due to a strong US Dollar and upcoming Federal Reserve decisions. However, geopolitical risks and economic data releases may influence future movements. For the latest updates on gold prices and market trends, visit Daily Gold Signal and explore our Daily Gold Update.
