Gold prices are on the rise once again, continuing a recovery that has lasted for the past three days. This recent surge can be attributed to the growing speculation that the Federal Reserve will increase interest rates by 50 basis points in September. The market is reacting to weak US economic data, hinting at a possibly worse-than-expected future. Last week’s concerns about a potential recession in the United States have caused a stir among investors, leading to an atmosphere of caution in the market.
Impact of Inflation Data on Gold Price
All eyes are now on the upcoming release of the US inflation report for July, as it is expected to provide more clarity on the Federal Reserve’s future monetary policy decisions. The geopolitical tensions in the global landscape are also contributing to the positive outlook for gold prices. Technical analysis indicates a bullish trend on the daily chart, with Monday’s surge breaking above the key Fibonacci level of 61.8%. This breakthrough, combined with other positive indicators, suggests that the momentum is in favor of the bulls.
Anticipated Targets and Key Support Levels
As the market awaits the US CPI data, analysts are eyeing potential price targets for gold. The next resistance levels are identified at $2452 (Fibonacci 76.4%) and $2477 (August 2 spike high), with the ultimate goal being a new all-time high at $2483. On the downside, the rising 10-day moving average at $2422 and the broken Fibonacci 50% level act as solid supports, maintaining the bullish structure of the market. Investors should pay close attention to the resistance levels at $2452, $2462, $2477, and $2483, as well as the support levels at $2433, $2422, $2418, and $2403.
Overall, the current state of the gold market is influenced by a combination of factors, including economic data, Federal Reserve policies, geopolitical tensions, and technical indicators. While the recent surge in prices is encouraging for gold investors, the market remains volatile and sensitive to external events. It is essential for traders to use caution and stay informed about upcoming data releases and developments that could impact the price of gold.