Gold price rises amid geopolitical tensions experienced a significant increase of over 1% on Monday. This rise occurred during the mid-North American session as US Treasury bond yields fell. The market anticipates the upcoming Consumer Price Index (CPI) report for July, expecting it to indicate progress in disinflation. Currently, the XAU/USD stands at $2,467 after recovering from a low of $2,423.
Geopolitical Tensions Affecting Market Sentiment
Gold price rises amid geopolitical tensions situation in the Middle East has worsened, causing market unease. The lack of progress toward a ceasefire agreement between Israel, Lebanon, and Iran has heightened tensions. This uncertainty has led investors to seek the safety of gold, boosting its appeal as a safe-haven asset.
US Treasury Yields and Inflation Expectations
US Treasury bond yields decreased, with the 10-year benchmark note rate falling four basis points to 3.902%. This drop comes ahead of the expected inflation data release. Federal Reserve Governor Michele Bowman maintained a neutral stance, in contrast to her usual hawkish tone, noting recent inflation progress.
Economic Calendar Highlights
This week’s economic schedule features a number of important events:
- Tuesday and Wednesday: Release of US inflation figures.
- Thursday: Retail Sales data.
- Friday: University of Michigan (UoM) Consumer Sentiment.
Gold Price Trends and Market Insights
Despite China’s central bank avoiding gold purchases for the third month, gold prices continued to rise. The CME FedWatch Tool indicates a 47.5% probability of a 50-basis-point rate cut by the Fed in September, a decrease from 52.5% last Friday.
Technical Analysis: Gold Price Movements
Gold’s uptrend persisted on Monday, with prices nearing $2,470. If inflation figures are lower than expected, prices may test the all-time high (ATH) of $2,483. The Relative Strength Index (RSI) supports a bullish trend.
Resistance Levels
Initial resistance is the ATH. A breakthrough could lead to a psychological resistance level of $2,500, with further gains potentially reaching $2,550 and $2,600.
Support Levels
If XAU/USD falls below $2,450, support may be found at $2,400. The 50-day Simple Moving Average (SMA) at $2,373 could also act as a support level. If this is breached, the decline may extend to the 100-day SMA at $2,352 and a support trendline around $2,320.
For more updates on gold prices and detailed market analyses, visit Daily Gold Signal. Check out the Daily Gold Update for the latest trends and forecasts.
