Gold price continue to struggle below the $2,500 mark as traders remain cautious ahead of a key speech by Fed Chair Jerome Powell at the Jackson Hole Symposium. With the US Dollar showing signs of weakness and lower interest rates anticipated, investors are eyeing geopolitical factors and market dynamics to gauge the next move for gold.
Market Overview: Gold Price Movements
The XAU/USD managed to recover slightly after a sharp drop on Thursday, which pushed it to a weekly low. Although the US Dollar attempted to rebound from its year-to-date low, the outlook for lower US interest rates kept it under pressure. This, in turn, supported a modest rise in gold prices. However, concerns about upcoming comments from Powell have made traders hesitant to make significant bullish bets, keeping the metal below $2,500 as the European session begins.
Key Focus: Powell’s Speech and Market Reactions
The upcoming speech by Powell is expected to provide critical insights into the Federal Reserve’s monetary policy, particularly regarding future rate cuts. These insights could greatly impact USD price movements and influence gold’s direction. Market participants are closely watching for any signals that could either boost or weigh on the yellow metal.
Market Movers: Digesting the US Dollar and Bond Yields
On Thursday, the US Dollar made an effort to recover from its 2024 low, supported by rebounding Treasury bond yields. However, the lack of follow-through due to expectations of a rate cut in September limited the currency’s gains and kept gold prices relatively stable.
Meanwhile, economic data from the US showed mixed signals. The Department of Labor reported a slight increase in initial jobless claims, while a revision of employment data revealed that fewer jobs were added than initially reported. Moreover, the minutes from the recent FOMC meeting highlighted growing support for a rate cut as inflation continues to ease.
Technical Analysis: Key Support and Resistance Levels
From a technical standpoint, gold’s recent decline found support near the $2,370 level, which now acts as a critical point. A break below this could lead to further losses, pushing prices toward the $2,345-2,343 range. However, if the price climbs back above $2,500, it could face resistance around the $2,513-2,514 area. A breakthrough here may set the stage for further upward momentum toward the $2,531-2,532 region.
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