Gold price rises due to geopolitical tensions and fed rate cut hopes is currently trading around $2,440. It has gained about 0.45% from yesterday. This rise is due to concerns about global conflicts and expectations that the Federal Reserve (Fed) might cut interest rates. Lower rates make gold more appealing since it doesn’t earn interest.
Why is Gold Going Up?
Gold price rises due to geopolitical tensions and fed rate cut hopes are rising because of worries about the situation in Gaza. Investors are purchasing gold as a secure investment. Israeli Defence Minister Yoav Gallant has warned of a possible large-scale attack by Iran, which could make the situation worse and affect global stability.
Fed Rate Cut Expectations
Gold is also going up because many expect the Fed to lower interest rates in September. The CME FedWatch Tool shows a 49.5% chance of a 0.25% rate cut and a 50.5% chance of a 0.50% cut. Reduced interest rates increase gold’s appeal because it does not generate interest.
Upcoming Reports
Two important reports will come out soon: the US Consumer Price Index (CPI) for July and the Producer Price Index (PPI). These reports could influence future interest rates and gold prices.
CPI for July is expected to rise by 0.2% for both headline and core figures. This follows a slight decline in June. If CPI results are higher than expected, it might lead to doubts about aggressive rate cuts, which could hurt gold prices.
Technical Analysis: Gold’s Price Movement
Gold is currently moving sideways but is showing an upward trend. It may continue this way until a major breakout happens. The narrowing range suggests a potential triangle pattern, though it’s too early to confirm.
XAU/USD 4-Hour Chart
Gold might keep rising until it reaches around $2,475. A breakout above this level could lead to higher prices, possibly reaching $2,550 based on Fibonacci ratios.
A clear breakout would be shown by a long green candle going above the range or three green candles breaking this level.
Conclusion
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