Gold price struggles are having a tough time rising, staying below the important $2,500 mark in the Asian market on Thursday. Even though there are hopes for a big interest rate cut by the Federal Reserve, traders are being cautious. They’re waiting for key economic reports from the US to see how the economy is doing before making any big moves.
Current Gold Price Situation
Gold price struggles (XAU/USD) has been moving sideways, unable to break above $2,500. On Wednesday, it hit a two-week low but managed to hold steady. This is because many believe the Federal Reserve will cut interest rates in September. The idea comes after a report showed that job openings in the US fell to the lowest level in three and a half years in July.
Why Traders Are Cautious
Even with this positive news for gold, traders are hesitant to make big bets. They’re waiting for the US jobs report, known as the Nonfarm Payrolls (NFP), which is due on Friday. This report will give a clearer picture of the US economy. Before that, on Thursday, traders will also look at the ADP employment report, Weekly Jobless Claims, and the ISM Services PMI for any short-term trading opportunities.
What’s Affecting Gold Prices
US Job Market Slows Down
A recent report, the Job Openings and Labor Turnover Survey (JOLTS), showed that job openings dropped to 7.673 million in July, the lowest since January 2021. This indicates a weakening job market. Additionally, the Federal Reserve’s Beige Book revealed that economic activity in many regions of the US is either flat or declining.
Fed’s Possible Interest Rate Cut
The Federal Reserve is leaning towards cutting interest rates, with officials like Raphael Bostic saying that inflation pressures are easing. This has led many to believe that the Fed might cut rates by 50 basis points in their September meeting, according to the CME Group’s FedWatch Tool. This expectation has pushed US Treasury yields to their lowest levels in months, weakening the US Dollar and providing some support for gold prices.
Gold’s Technical Outlook
From a technical perspective, gold prices could start rising again if they break above the $2,524-$2,525 resistance zone. If this happens, we might see gold retesting its all-time high near $2,531-$2,532. On the downside, if gold falls below $2,470, it could slide further, with the next key support level around $2,435.
Conclusion
Gold traders are being cautious as they wait for important US economic reports. Even though there are positive signs, like weaker bond yields and hopes for a Fed rate cut, many are holding back until more data comes in. This could lead to opportunities to buy gold at lower prices if the data supports a bullish outlook.
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